DFS stock moved lower after the credit-card issuer said that wants to raise its quarterly dividend from 20 cents to 24 cents per DFS share, a 20% increase. DFS also indicated that it would like to repurchase DFS stock worth $1.6 billion over the next year, the Associated Press notes.
The dividend hike and DFS share buyback plan were part of the capital plan DFS submitted to the Federal Reserve. Next week, the Fed will reveal which banks have received approval to raise dividends and buy back more shares.
DFS has cleared the Fed’s annual “stress test,” which assesses its ability to survive a worldwide economic crisis or deep U.S. recession.
On Thursday, DFS stock closed at $58.72. Over the past 12 months. DFS stock has gained more than 25%.