General Electric Co moved to raise its dividend by 20 percent on Friday, in a sign that the largest US conglomerate has put the worst of the financial crisis behind it. The move came sooner than many investors had expected and sent GE shares up 3.2 percent in afternoon trading.
The 2 cent per share quarterly dividend hike, which means the world's largest maker of jet engines and electric turbines will now pay investors 12 cents per share each quarter, still leaves GE's dividend below the 31 cent per share quarterly rate it had in place before cutting its dividend in February 2009.
The new dividend is payable October 25 to shareholders of record as of the close of business on September 20. The company also said it will resume buying its shares, a practice it had halted on September 25, 2008. It is extending its existing share-buyback plan, which was due to expire on December 31, though 2013. The board has authorised it to buy back up to an additional $11.6 billion in shares.
GE last week reported a better-than-expected 16 percent rise in second-quarter profits, breaking a streak of more than two years of declining earnings. GE shares were up 49 cents or 3.2 percent at $15.70 on the New York Stock Exchange on Friday afternoon.