Goodyear Gives Greenlight To First Dividend In 11 Years

Goodyear in the past decade has seemed perpetually stuck in neutral, if not outrightly slipping into reverse. Fortunes somewhat reversed, Goodyear this morning said it plans to pay its first dividend since 2002.[/entity]

The tiremaker will pay a five cent dividend effective Dec. 1. In addition, Goodyear will buyback $100 million of common stock, with the purchases offsetting new shares issued under equity-compensation plans.

The decision to directly share cash with shareholders is a way of reward patience: Goodyear has fought to become more profitable while also dodging the economic downturns that devastated carmakers like General Motors GM +0.46% and Ford Motor F -0.74%. Goodyear is the largest manufacturer of tires in the United States.

Particularly at issue for Goodyear was moving from low-margin tires to more expensive ones. Meanwhile, the company suffered through labor strife–a 2006 strike lasted for three months–and plant closures.

Shares of Goodyear rose 4.4% to $23.20 in pre-market trading. The stock still hasn’t reached all-time highs set in 2007, and in the past five years, shares have risen only 29.4% while the S&P 500 gained 37.6%.

Reach Abram Brown at abrown@forbes.com.