Delta plans to boost dividend by 50%, step up stock buybacks

Delta Air Lines Inc. said Monday in a presentation to analysts that it will increase it's annual dividend by 50% to 81 cents a share from 54 cents a share, in the third quarter. At current prices, the new annual dividend would imply a dividend yield of 1.9%, compared with the aggregate S&P 500 yield of 2.2%, according to FactSet. Delta's stock shot up 3.3% in midday trade. The airline company said it planned to buy back $3 billion worth of its shares, which is what remained from the $5 billion stock repurchase program announced last year, by May 2017, including $375 million in accelerated share repurchases planned for the current quarter. Delta said it expects to remove about 1 percentage point of planned capacity growth during the second half of the year. The stock has dropped 15% year to date, while the NYSE Arca Airline index has slipped 3.2% and the S&P 500 gained 1%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.