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Restaurateur Cracker Barrel Old Country Store Inc. (CBRL - Snapshot Report) has approved a share repurchase program, thereby maintaining the trend of returning wealth to its shareholders. The authorization is effective immediately and substitutes the prior authorization.

Under this program, the company is authorized to repurchase up to $50.0 million of its common stock. The authorization expires on Sep 24, 2014. Prior to this, the board had approved the repurchase of up to $100 million of common stock on Sep 19, 2012.

The increase in share buyback authorization reflects the company’s confidence in its fundamentals. At the same time, the share buyback will help the company reduce share count, thereby increasing earnings per share and return on equity. Apart from enhancing shareholder value, this strategic move will also lift the relatively undervalued share price.

This Zacks Rank #3 (Hold) company also has a dividend distribution policy in place. The company had tripled its annualized dividend payout to $3 per share at the current level from $1 per share in Nov 2011. The latest hike of 50% in quarterly dividend payment to 75 cents was announced in the fourth quarter of fiscal 2013.

With the recent uptick in buyback authorization, the restaurateur also announced the distribution of its regular quarterly dividend of 75 cents on Nov 5, 2013 to shareholders of record as of Oct 18, 2013. Crackle Barrel ended the fiscal 2013 with $121.7 million (down 19.9% year over year) in cash and $400 million (down 23.8% year over year) in long-term debt.

On Sep 17, 2013, Biglari Holdings Inc. – Cracker Barrel's biggest stockholder –insisted on declaring a special dividend of 20 cents per share. But the Cracker Barrel board ruled out the proposal claiming that the payment would go against the long-term value offered to shareholders. Had the payment been approved, it would have put substantial pressure on leverage, thereby affecting the company’s risk profile.  

There are several other restaurant chains, which pay attractive dividends. McDonald's Inc. (MCD - Analyst Report), Yum! Brands Inc. (YUM - Analyst Report) and Brinker International Inc. (EAT - Analyst Report) announced hike in their quarterly dividend this month by a respective 5%, 10% and 20% to 81 cents, 37 cents and 24 cents per share.

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