Cliffs Natural Resources Inc.'s (CLF) board doubled the mining company's quarterly dividend Monday.
Dividends have increased in popularity alongside share buybacks as companies, with operations recovering and credit markets fluid, use extra cash to appeal to investors.
The company moved the dividend to 28 cents a share, with the increase costing roughly $19 million each payout.
Chief Financial Officer Laurie Brlas said the move reflects "Cliffs's approach to capital allocation, which includes distributing excess cash to shareholders through sustainable ordinary dividend increases."
She added that the company's projected growth positions it to deliver "strong future cash flows" this year and beyond.
The company reported strong average revenue from product sales in its main iron-ore segment in the latest quarter, which more than offset a decline in the segment's volume. Its overall earnings more than quintupled on benefits from a settlement with ArcelorMittal (MT, MT.AE) in addition to higher pricing across its units.
In general, Cliffs' earnings have been soaring recently on not only price gains but also higher volumes, thanks to strong iron-ore demand from China and dim prospects for new output capacity.
Shares were up 0.4% at $95.40 after-hours. Through the close, the stock has risen 22% so far this year, better than the market at large.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; email@example.com