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What's happening?
Biotech bluechip Gilead Sciences (NASDAQ:GILD) announced today that it will be raising its dividend payment by 10% starting in the second quarter of 2016. Its new payout will be $0.47 per share per quarter, which gives its shares a forward yield of roughly 2.2% at current market prices.

In addition, Gilead's Board of Directors approved an additional $12 billion share repurchase program that will kick in once the company's current $15 billion repurchase program is completed. As of the end of 2015 Gilead had approximately $8 billion remaining under its old plan, but that number should dwindle quickly as the company plans repurchase $5 billion worth of shares in first quarter of 2016. 

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Does it matter?
In the release, Gilead's outgoing CEO John Martin stated:

Today's announcement reflects confidence in the company's long term cash flows and our commitment to use our cash to invest for future growth and deliver shareholder return.

With the company's stock down roughly 30% from its summer time highs, I think it's a great time for the company to get aggressive with its efforts to return capital to shareholders. The market appears to agree as shares are up roughly 3% today.

Still, it's not all sunshine and roses for Gilead. It will be an uphill battle in 2016 as Gilead's hepatitis C drugs Harvoni and Sovaldi will face new competition now that Merck's drug Zepatier has won FDA approval. That's especially true when considering that Merck plans to win market share by competing heavily on price. Zepatier costs $54,600, a 42% discount to the list price of Gilead's Harvoni.

Only time will tell what kind of impact Merck's aggressive pricing strategy will have on Gilead's financial statements, but as long as Gilead share price continues to sag I applaud management's move to return more cash to shareholders. 

Brian Feroldi owns shares of Gilead Sciences. The Motley Fool owns shares of and recommends Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.