Cummins (NYSE:CMI)has decided to inject a little power into its payout. The company has lifted its dividend, declaring a distribution of $0.625 per share to be paid on Sept. 3 to shareholders of record as of Aug. 22. That amount is $0.125, or 25%, higher than the firm's previous disbursement of $0.50 paid in early June.
In the press release heralding the news, Cummins quoted its CEO Tom Linebarger as saying that the raise, combined with its existing share buyback program, "reflects our confidence in the long-term prospects for the company and demonstrates our commitment to increasing returns to shareholders."
The new dividend annualizes to $2.50 per share. That yields 2.2% at Cummins' most recent closing stock price of $112.62.
Fool contributor Eric Volkman has no position in Cummins. The Motley Fool recommends and owns shares of Cummins. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.