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Investing.com – Ally Financial stock (NYSE:ALLY) rose 2.1% in Wednesday’s premarket trading after the company’s board approved a fresh share repurchase program as well as a higher dividend.
The company said it expects to begin repurchasing shares in the first quarter of 2022 and spend up to $2 billion through the year on the exercise. Ally recently completed a $2 billion share repurchase program in 2021.
Tuesday’s closing price of $50.54 gave Ally’s equity base of over 346 million shares a market cap of $17.5 billion. At that price, a $2 billion outlay allows the company to buy close to 40 million shares or just over 11% of its equity.
The share buyback does not the tie the company to any quantity or any price it must buy the shares at.
Ally will also pay a dividend of 30 cents a share to its shareholders, a 20% increase. Shareholders whose names appear in the company’s books as on February 1 will get the dividend.
Holders of the company’s series B and C preferred stocks will also get dividends.
