Bristol Myers Squibb (BMY -0.96%) has upsized its stock buyback program by 45%. The company announced on Monday that its board of directors has authorized an additional $2 billion in such repurchases. This brings the total amount authorized under the initiative to roughly $6.4 billion.

As is typical with such announcements, Bristol Myers added a caveat: "The timing and amount of any share repurchases under the authorization will be determined by management at its discretion and based on market conditions and other considerations." It also cautioned that the program could be canceled or suspended at any time.

Healthcare worker holding dollar sign paperweight.

Image source: Getty Images.

In recent years, Bristol Myers has hardly been shy about supporting its share price with buybacks. In 2019, for example, it spent $7.3 billion on repurchasing its stock.

What helps is that the company has seen dramatic improvements in its free cash flow (FCF). In that year, FCF grew by almost 45% on a year-over-year basis. Such growth is not only helping the company fund its stock buybacks, but also supporting a quarterly dividend that gets a modest lift every year. Since early 2014, that payout has risen steadily from $0.36 per share to the current $0.49.

Some consider Bristol Myers to be a bargain stock due to its low valuations and its current product lineup, which includes several blockbuster drugs.

Perhaps with that in mind, investors were clearly impressed by Bristol Myers' new commitment to share buybacks. The stock closed up by almost 4% on Monday, in contrast to the 0.7% decline of the S&P 500 index.