By Dhirendra Tripathi

Investing.com – Dell Technologies stock (NYSE:) rose 3.8% Thursday after the company gave long-term guidance and announced a couple of pro-shareholder moves including a dividend and a share buyback.

For fiscal year 2026, Dell Technologies expects to see a compounded increase of 3%-4% in annual revenue and an additional 6% in adjusted earnings per shares. The company currently is in the third quarter for financial year 2022.

Dell intends to return 40-60% of the adjusted free cashflow to shareholders via share repurchases or dividends starting in February.

Also, Dell proposes to buy shares up to $5B starting in November 2021 after completion of VMware’s spin-off. In addition, the company plans to start dividends payments every three months starting in the first quarter next year.

The company is targeting a $1 billion annual dividend on 765.11million shares of its equity base.

After approval by the board, the company stated that it would announce the exact dividend rate as well as other details about its dividend program.

Dell’s total second-quarter revenue was up 15% to $26.1 billion. Earnings per share adjusted was $2.24. This is 17% more than the estimate of analysts who had expected it to be $2.03.

It reiterated the third quarter’s guidance that revenue would grow 17% over the year, at midpoint.

The company forecasted that Dell’s adjusted annual EPS would be between $3.69 to $3.75 in the third quarter, an increase of more than 50% over the previous year.

Dell will spin off its VMware 81% share. The company’s plan will see VMware distribute a special cash dividend of $11.5 billion to $12 billion to all VMware shareholders. The proceeds will be used by Dell to reduce its debt.

Later, Dell will partner with VMware while VMware continues to use Dell Financial Services.