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Mastercard’s $11 Billion Share Buyback Mimics Visa’s Strategy
December 6, 2023
The financial company, Mastercard, just made some exciting financial maneuvers. The company’s board gave a green light for an impressive new share repurchase program that will allow the payments processor to repurchase up to $11 billion of its Class A shares.
But that’s not all. The quarterly dividend is also seeing a considerable boost, jumping from 57 cents to 66 cents per share. This upgrade represents a significant return for investors who are riding the wave with Mastercard.
The new repurchase initiative will kick into gear right as Mastercard wraps up its previously publicized $9 billion repurchase program. This timing ensures a seamless transition from one program to another without missing a beat.
Investors responded positively to the news, with shares of Mastercard exhibiting a 1% uptick to land at $411.75 in after-hours trading. It’s a prime example of how strategic financial decisions can buoy investor confidence and share prices.
Mastercard isn’t the only player in the finance game making such moves. Its major rival, Visa, took a similar path back in October. The company rolled out its own multiyear share repurchase program worth $25 billion.
Additionally, Visa previously announced an impressive 16% rise in its quarterly cash dividend, escalating it to 52 cents per share from the previous 45 cents. The announcement came as part of the company’s reporting of its fourth-quarter results. This increase in dividends equals an annual payout of $2.08 per share, which translates into an annual yield of 0.88%. This yield calculation is based on Visa’s closing stock price of $234.65 as of Oct. 24.
An interesting fact to note here is that this isn’t the first time Visa has upped its game in terms of dividends. In fact, the company had last increased its dividend only a year ago, raising it by a commendable 20% to 45 cents.
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