Along with its fiscal second-quarter earnings report on Thursday afternoon, ski and lodging company Vail Resorts (MTN -0.37%) provided an update on its plans for returning capital to shareholders. The more aggressive plan included a higher quarterly dividend payment and a larger share repurchase program. The enhanced capital-return program highlights the company's strong balance sheet and the underlying business' ability to throw off heaps of cash.

Here's a closer look at Vail's dividend -- and why shareholders should love it.

1. Dividend growth

On Thursday, Vail said it was increasing its quarterly cash dividend to shareholders to $2.06. The quarterly payout is up 8% from the company's previous quarterly dividend.

This growth comes as Vail's own business is growing nicely. Fiscal second-quarter revenue rose 21.5% year over year to more than $1.1. billion. Furthermore, management said its dividend increase reflects the company's confidence in Vail's "free cash flow generation and stability of the underlying business model."

While this is great, investors should note that the company's dividend history isn't without blemish. COVID-19 wreaked havoc on Vail's business, leading the company to temporarily suspend its dividend in 2020. Though it resumed it in late 2021, the payment amounted to half of what it was before the pandemic. A huge dividend hike last year, however, put the quarterly payment at record levels.

Now another increase, announced on Thursday, extends the dividend amount's distance beyond pre-pandemic levels. The $2.06 quarterly payout is 17% higher than its last quarterly payout before the pandemic.

2. A robust dividend yield

One particularly attractive aspect of Vail stock is its dividend yield. A $2.06 quarterly dividend payment comes out to $8.24 of dividend payments annually, giving the stock a dividend yield of about 3.6% based on the stock's price at the time of this writing. This is far in excess of the average dividend yield of 1.7% for stocks in the S&P 500

A dividend yield this robust is particularly attractive in times of uncertainty like we have now. Quality dividend stocks can help offset some of the pain of declines in stock prices thanks to their consistent cash payments to shareholders. Vail's quarterly cash payment should remain steady, if not even grow (as long travel doesn't get rattled by a pandemic again).

3. A conservative payout ratio

Finally, investors should note that Vail's payout ratio, or the percentage of the ski resort specialist's earnings that it pays out in dividends, is conservative. For the trailing-12-month period ended Oct. 31, Vail's payout ratio was 76%.

This leaves plenty of wiggle room for Vail to maintain its dividend payments, even if earnings take a hit. More importantly, it's low enough that Vail will likely be able to continue growing its dividends in the years to come, even if earnings grow only moderately.

Looking beyond Vail's dividend, the company's updated share buyback program is worth highlighting, too. After all, this is another way the company is returning cash to shareholders (albeit indirectly).

Not only did management say it is expanding its share repurchase authorization from 2.5 million shares to 3.5 million shares, but it explicitly stated that it intends to be "aggressive" with its efforts to return capital to shareholders. Aggressive share repurchases as part of a 3.5 million share buyback could make a dent; the authorization accounts for nearly 9% of Vail's outstanding shares.

Vail's dividend, combined with the company's share repurchase authorization, offers shareholders an attractive reason to stick around for the long haul.