Why Wells Fargo (WFC) Shares Are Rising

Wells Fargo & Co WFC shares are trading higher by 2.64% to $46.68 Wednesday morning after the company on Thursday raised its quarterly dividend and announced a $30 billion stock repurchase program.

What Happened?

Wells Fargo approved a quarterly common stock dividend of 35 cents per share, payable on Sept. 1, to stockholders of record on Aug. 4. This represents a 5 cents per share increase from the previous quarter.

The Wells Fargo board of directors also approved a common stock repurchase program of up to $30 billion. Wells Fargo says the program will be executed based on the company's internal capital adequacy framework, taking into account market conditions, potential regulatory capital requirements changes and other risk factors.

CEO Charlie Scharf stated that their top priority is investing in risk and control infrastructure, as well as updating capabilities for customers and supporting employees and communities.

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What Else?

A stock buyback can signal that Wells Fargo believes its shares are undervalued and that it has confidence in its future performance. This can instill confidence in investors, leading them to buy or hold onto their shares.

In general, buybacks allow the company to return excess capital to shareholders, indicating a commitment to maximizing shareholder value. Investors may view this favorably and become more interested in owning the stock, leading to increased demand and a potential rise in the stock price.

According to data from Benzinga Pro, WFC has a 52-week high of $48.84 and a 52-week low of $35.25.