Valvoline (VVV) will raise its quarterly dividend by 42.3 percent to $0.106 per share in the fourth quarter of 2018. The lubricants maker initiated a dividend in 2016.

The increased dividend will be payable on Dec. 17, 2018, to shareholders of record as of the close of business on Nov. 30, 2018. The new annualized dividend rate yields 2.0% at a stock price of $21.09 for VVV.

"Valvoline's business model — which produces strong profitability and stable earnings, combined with consistent free cash flow generation — allows us to both invest back into the business for growth while also returning cash to shareholders," said Sam Mitchell, chief executive officer. "The significant increase in our dividend demonstrates our continued commitment to maintaining a balanced approach to creating shareholder value."

Valvoline Inc. is a producer and distributor of automotive, commercial and industrial lubricants, and automotive chemicals. The company operates and franchises Valvoline Instant Oil Change centers in the United States. It also markets Valvoline lubricants and automotive chemicals, MaxLife lubricants, SynPower synthetic motor oil and Zerex antifreeze. Valvoline was spun off from Ashland Global Holdings (ASH) in 2016.