Guess which ASX 200 stock is up 17% on big news

Nickel Industries Ltd (ASX: NIC) shares are having a very strong session.

In morning trade, the ASX 200 nickel stock is up 17% to 70.5 cents.

Why is this ASX 200 stock jumping?

There are a couple of reasons why investors have been buying this nickel producer’s shares on Tuesday.

The first is the release of a quarterly update which revealed record production and sales volumes.

According to the release, production came in at a record of 34,450 tonnes of nickel metal. This is up from 29,367 tonnes during the previous quarter.

This allowed the ASX 200 stock to sell a record 34,427 tonnes of nickel metal. This was an 18% increase on the prior corresponding period.

There were no records for its earnings, though. Softer pricing led to EBITDA falling quarter on quarter to US$85.1 million from US$97.6 million.

Nevertheless, at the end of the quarter the company had cash, receivables, and inventory of US$1,302.5 million.

What else is happening?

Also getting investors excited was news that the ASX 200 stock is planning to return funds to investors through an on-market share buyback.

Nickel Industries intends to return up to US$100 million of additional capital to shareholders over the next 12 months, in addition to dividends.

Speaking of dividends, this morning the company announced a revised dividend policy. The new policy will see between 30% and 60% of free cash flow returned to shareholders by way of regular dividends declared on an interim and final basis each financial year.

The ASX 200 stock’s managing director, Justin Werner, said:

Nickel Industries has transitioned into a position to target higher shareholder returns via our new Capital Management Framework through strong operating performance. The revised dividend policy represents a significant uplift from existing dividend levels and will allow for greater returns to shareholders. We are pleased to announce an initial on-market share buyback as we strongly believe the current share price undervalues the Company.

The post Guess which ASX 200 stock is up 17% on big news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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