(Bloomberg) -- Synchrony Financial climbed in New York trading after the private label credit-card issuer's inaugural dividend exceeded analysts' estimates.
Synchrony rose 4.2 percent to $27.12 at 9:32 a.m., the most intraday since February. The Stamford, Connecticut-based company, which went public in July 2014 after splitting off from General Electric Co., said in a filing Thursday that its board approved a 13-cent quarterly dividend along with a $952 million share repurchase program.
“Synchrony's capital plan is likely to be received positively given it is slightly better than some of the Street assumptions,” said Sanjay Sakhrani, a Keefe, Bruyette & Woods analyst, who had estimated a 10-cent dividend. “This could be a positive catalyst.”
Synchrony, which issues credit cards for retailers including Wal-Mart Stores Inc. and Dick's Sporting Goods Inc., said in June it expects higher write-offs within the next year as consumers struggle to repay loans. The announcement sparked a sell-off in credit-card issuers as investors worried that credit trends were beginning to deteriorate.
Synchrony tumbled 14 percent this year through Thursday, compared with the 5.7 percent drop of the 92-company S&P 500 Financials Index.
To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net. To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Steven Crabill, Steve Dickson
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