Southwest Airlines Boosts Dividend, Sets New Stock Buyback Program

Southwest Airlines Co. said Wednesday it raised its quarterly dividend by 25% to 12.5 cents a share from 10 cents a share, and announced a new $2 billion share repurchase program. The new dividend will be payable June 28 to shareholders of record on Jun 7. At current stock prices, the new annual dividend rate implies a dividend yield of 0.87%, below the implied dividend yield for the S&P 500 of 2.04%, according to FactSet. Separately, the air carrier said it launched its new stock buyback program after completing the $2 billion program launched in May 2016, which was completed earlier this month. The stock, which slumped 1.2% in afternoon trade, has soared 15% year to date, which the NYSE Arca Airline Index has ticked up 2.2% and the S&P 500 has gained 6.0%.