French automaker Renault (RNO) is raising its annual dividend payment to shareholders by 640%, news that has sent the company’s stock up 7% in European trading.
Specifically, Renault is lifting its dividend payout to 1.85 euros ($1.99 U.S.) per share for the financial year, up 640% from 0.25 euros ($0.27 U.S.) previously.
The company announced the massive dividend increase as it reported strong quarterly results, with an operating margin of 7.9%, the top end of its guidance.
Renault said in its earnings statement that it is targeting free cash flow of at least 2.5 billion euros ($2.68 billion U.S.) in 2024.
The company said it is also focusing on 10 new vehicle launches and accelerating its electric vehicle (EV) and software strategy.
Renault said the new dividend payment to its shareholders should be sustainable over the long-term based on its continued earnings growth.
Prior to today (Feb. 15), the stock of Renault had declined 7% over the past 12 months to trade at 40 euros ($42.85 U.S.) per share.
