Mastercard (MA.US) unveils new shareholder return plan, ups stock buyback to $12bn
1min read The world's largest credit card issuer and payment processor, Mastercard (MA.US), announced a new shareholder return plan on Tuesday, including a new stock buyback program that authorizes the company to repurchase up to $12 billion of Class A shares, as well as an increase in its quarterly dividend to $0.76 per share from $0.66 per share.
The latest statement also showed that the payment processing giant would raise its quarterly dividend from the previous $0.66 per share to $0.76 per share. The company said its latest stock buyback program would take effect after the completion of its previously announced $11 billion program.
Mastercard said it had about $3.9 billion remaining in its current stock buyback program as of December 13. The news of the new stock buyback and higher dividend boosted the company's shares after-hours trading, up about 0.72% to $534.83.
Mastercard's third-quarter results beat expectations as US consumers continued to increase their spending amid healthy wage growth, a resilient labor market, and economic stability. The company's profit grew 2% to $3.3 billion in the three months ended September 30. Revenue grew 13% to $7.4 billion. Adjusted earnings per share were $3.89, topping the market's expectation of $3.74. Mastercard's payment network revenue grew 11% above expectations. Value-added services and solutions grew 19% year-on-year, accounting for 37% of Mastercard's total revenue.
Mastercard's growth trend in the third quarter also indicated that its diversified business portfolio, including credit cards, mobile payments, P2P transactions, and fraud protection, is more resilient. Mastercard CEO Michael Miebach said in the earnings report: "These results reflect healthy consumer spending and continued strong demand for our value-added services and solutions."
