Bloomberg News

MasterCard Doubles Dividend, Sets $2 Billion Buyback Plan

February 05, 2013

MasterCard Doubles Dividend, Sets $2 Billion Share Buyback

MasterCard posted fourth-quarter profit last week that beat analysts’ estimates as customers made more purchases. Photographer: Daniel Acker/Bloomberg

MasterCard Inc. (MA:US), the second-biggest U.S. payments network, doubled its quarterly dividend to 60 cents a share and approved a stock-repurchase program of as much as $2 billion.

“Our strong financial performance allows us to increase the return of cash to shareholders,” Chief Executive Officer Ajay Banga said today in a statement. “We remain focused on executing our strategy and growing our business.”

MasterCard posted fourth-quarter profit last week that beat analysts’ estimates as customers made more purchases. Banga, 53, is fending off competitors Visa Inc. (V:US) and Shanghai-based China UnionPay as the company seeks a larger share of the electronic payments-processing market. Banga is targeting developing countries for growth amid a consumer shift from cash to plastic.

MasterCard, based in Purchase, New York, rose (MA:US) 1.4 percent to $521.60 at 8:22 a.m. in early trading in New York. The shares gained 4.7 percent this year through yesterday.

The company will pay the dividend on May 9 to holders of record of its Class A and Class B common stock as of April 9, according to the statement.

This is the second time that the MasterCard board has doubled the firm’s dividend in the past year. Shareholders received a 15-cent quarterly payout between 2007 and last February, according to data (MA:US) compiled by Bloomberg. The previous dividend was 9 cents a quarter, the data show.

Buyback Plan

Visa, the biggest payments network, boosted its quarterly dividend (V:US) to 33 cents from 22 cents in December, according to data compiled by Bloomberg. The Foster City, California-based company had increased the payout from 15 cents the previous year.

MasterCard’s board authorized the firm to repurchase as much as $2 billion of Class A stock, according to the statement. The share repurchase program will begin once MasterCard completes its current $1.5 billion plan, which had about $440 million remaining as of Jan. 25, the company said.

MasterCard increased 2012 profit by 15 percent to $2.8 billion compared with a year earlier. Shares jumped (MA:US) 32 percent for the year, more than doubling the 13 percent gain posted by the 70-company Standard & Poor’s 500 Information Technology Index. (S5INFT)

To contact the reporter on this story: Donal Griffin in New York at dgriffin10@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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Companies Mentioned

  • MA
    (MasterCard Inc)
    • $73.92 USD
    • -0.60
    • -0.81%
  • V
    (Visa Inc)
    • $213.37 USD
    • 2.44
    • 1.14%
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