Medtronic’s board OKs $5B stock buyback, raises dividend 7%

The board of directors at Medtronic (NYSE:MDT) OK’d a $5 billion stock buyback program today and raised the medical device maker’s dividend payout by 7%.

The new repurchasing program supersedes a 2015 plan to reacquire 80 million shares, or about 6% of the total at that time.

Today Medtronic said it’s also raising its dividend to 46¢ per share, representing an annual dividend of $1.84 per share. The dividend-per-share payout ratio is 40% of last year’s adjusted earnings per share of $4.60, the company said.

It’s the 40th consecutive dividend increase, which including today’s boost grew at a 17% compounded annual rate during those years.

“Today’s increase in our dividend demonstrates the confidence of the board and our management team in the strength of the company’s cash flow generation and the ability to generate value for our shareholders,” chairman & CEO Omar Ishrak said in prepared remarks. “We are committed to returning a minimum of 50% of our free cash flow each year through dividends and share repurchases, balancing the return of cash to our shareholders with disciplined reinvestment in our business to drive sustainable growth.”

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