MasterCard Inc. (MA), the second-biggest bank-card network, rose the most since August after announcing an 83 percent dividend increase and a 10-for-1 stock split.
MasterCard climbed 4.3 percent to $796.67 at 9:32 a.m. in New York. The shares increased 55 percent this year through yesterday, outpacing the 22 percent advance of the Standard & Poor’s 500 Information Technology Index and the 32 percent gain of larger rival Visa Inc. (V)
MasterCard’s board of directors raised its quarterly dividend to $1.10 a share and authorized repurchasing as much as $3.5 billion of stock, the Purchase, New York-based firm said yesterday in a statement. The share buyback program takes effect after the firm’s current $2 billion plan, announced in February, is complete.
The new buyback plan “continues to underscore management’s faith in MasterCard’s longer-term growth prospects and the company’s ongoing commitment to driving material shareholder value,” Darrin Peller, an analyst at Barclays Plc, wrote in a note. Barclays rates the stock as overweight.
MasterCard’s 12-month trailing dividend yield is 0.27 percent, lagging Visa’s 0.7 percent and the 1.6 percent yield of the S&P technology index, according to data compiled by Bloomberg. With yesterday’s increase, MasterCard’s projected yield is 0.58 percent, compared with Visa’s projected 0.8 percent yield, the data show.
MasterCard has returned more than 1,600 percent including dividends since its May 2006 initial public offering, dwarfing the 66 percent total return for the broader S&P 500 Index during that span.
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