The board of directors of MasterCard (NYSE: MA) declared the latest quarterly dividend of the company’s common stock. The credit card giant also launched a new large-scale share buyback program to replace an existing venture.
The dividend will be $ 0.44 per share, a 10% increase over its predecessor. This is to be paid on February 9th to record investors on January 8th. At the last closing price of the stock, this will yield slightly above 0.5%.
Similar to Archrival Visa (NYSE: V), Mastercard’s dividend has never been particularly profitable. That said, the company has been paying for one steadily for many years and routinely raises it once a year around December. Since the beginning of 2015, the payout has increased more or less steadily from $ 0.16 per share to the current level.
Again like Visa, Mastercard prefers to allocate its money to shareholder buybacks. Its new $ 6 billion repurchase program is smaller than a previous initiative in which the company was authorized to repurchase up to $ 8 billion in shares. The first will go into operation once the second is completed. Mastercard said about $ 3.8 billion of potential buybacks remain in the old.
Neither Visa nor Mastercard actually provide credit to their cardholders. They are therefore not exposed to the massive pandemic-induced credit default risks that many in the financial sector fear. However, in recent times both companies have struggled in the withered global economy. Mastercard’s third quarter saw a 14% decline in revenue and a 27% decline in non-GAAP net income (adjusted).
On Tuesday, Mastercard essentially traded sideways, lagging behind the modest gain of the S&P 500 index of the day.