(Updates with shares in fourth paragraph, Visa dividend history in seventh.)
Feb. 5 (Bloomberg) -- MasterCard Inc., 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. 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 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 compiled by Bloomberg. The previous dividend was 9 cents a quarter, the data show.
Visa, the biggest payments network, boosted its quarterly dividend 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 32 percent for the year, more than doubling the 13 percent gain posted by the 70-company Standard & Poor’s 500 Information Technology Index.
--Editors: Steve Dickson, Steven Crabill