FAIRFIELD, Conn. ( TheStreet) -- General Electric ( GE) shares rose Friday after the Dow component announced a 20% increase in its quarterly dividend and the resumption of its stock buyback.

The stock was up 2% to $15.49 in recent trades, just below its session-high. Volume was 39.2 million compared to the issue's trailing daily three-month average of 85.6 million.

The quarterly payout was lifted to 12 cents a share from 10 cents, and the higher dividend is payable Oct. 25 to shareholders of record as of Sept. 20. At the new payout rate, the annual yield on the common shares was 3.16% based on Thursday's closing price of $15.21.

The dividend increase follows a solid second quarter for GE, with $6.3 billion in industrial cash flow and improved credit metrics at GE Capital among many highlights.

The company also announced the resumption of its $15 billion stock buyback program, which was suspended in September 2008. The buyback plan has now been extended through 2013. The plan was originally scheduled to expire at the end of 2010. The company has an authorization of $11.6 billion left under the plan.

CEO Jeff Immelt said GE was able to increase the dividend earlier than previously expected, because of the company's "strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses."

He also said the company was planning on "capitalizing on strategic and financially attractive inorganic growth opportunities."

-- Written by Philip van Doorn in Jupiter, Fla.
Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.