Walgreen ( WAG) upped its quarterly dividend and said it will buy back $1 billion of stock over four years.

The drugstore chain, which put up $345 million in earnings on $9.6 billion in revenue last quarter, raised the quarterly payout to 5.25 cents from 4.31 cents, payable first in September. The increase will send about $9.6 million more out the door each quarter to shareholders of the Deerfield, Ill., firm.

"Our ability to simultaneously increase our dividend and initiate a stock repurchase program reflects our earnings performance and strong cash flow position," the company said in a release.

In after-hours trading, Walgreen's stock was up 40 cents, or 1%, to $36.85.

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