DineEquity, Inc. (DIN), the parent company of Applebee's Neighborhood Grill & Bar and IHOP restaurants, said Tuesday that its Board of Directors has approved 17% increase in the company's quarterly cash dividend to $0.875 per share.
The fourth quarter dividend will be payable on January 9, 2015 to the company's shareholders of record on December 3, 2014.
The company also said its board has approved an increase in the share repurchase authorization for the company's common stock, effective immediately, to $100 million from the remaining previous authorization of about $40 million.
The company anticipates using the majority of its remaining free cash flow after dividend payments for share repurchases.
"Given the substantial interest savings that will result from the securitization transaction, the time is right to announce our new capital allocation strategy. Our 99% franchised business model continues to generate strong and stable free cash flow. The meaningful increase in our quarterly cash dividend underscores our confidence in the future of our business," said Julia Stewart, Chairman and Chief Executive Officer of DineEquity.
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