Western Union shares up after dividend raise

AP News
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Posted: Dec 10, 2009 1:43 PM

Western Union Co. shares shot up Thursday, a day after the company boosted its annual dividend six-fold and authorized a $1 billion buyback plan.

Shares rose 81 cents, or more than 4 percent, to $18.99 in afternoon trading.

Raymond James & Associates analyst Wayne Johnson reiterated his "Outperform" rating in a note to investors.

"As we have previously stated, Western Union is an attractive free cash flow story and we believe the dividend increase and share repurchase authorization support our thesis," he said.

The company raised its dividend to 24 cents per share for the year, or 6 cents per share per quarter, up from 4 cents per share for the year.

A quarterly dividend of 6 cents per share is payable Dec. 30 to shareholders of record as of Dec. 21.

At Wednesday's closing price, the stock buyback authorization would repurchase 55 million shares, which would add 11 cents per share to Johnson's 2010 earnings estimate of $1.35, he said.

Analysts, surveyed by Thomson Financial expect $1.41 per share for 2010.