Cummins Inc. (CMI) increased its dividend 52%, adding the maker of truck engines and power-generation systems to the trend of companies rewarding shareholders by tapping into cash piles.
The company, which had about 196.2 million shares outstanding at March 27, raised its quarterly payout to 40 cents a share from 26.25 cents, an additional expense of about $27 million a quarter.
"Cummins had its most profitable year in its history in 2010 and we expect that 2011 will be an even better year," said Chairman and Chief Executive Tim Solso. "As a result, we are further rewarding our shareholders for their support."
The company reported in April its first-quarter profit more than doubled on strength in key international markets and a recovery in the North American truck market.
Shares recently rose 1.1% to $104.75 in premarket trading. The stock has gained 47% over the past 52 weeks, through Monday's close.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; firstname.lastname@example.org