Restaurant operator DineEquity Inc. said Friday that it was increasing both its quarterly dividend and stock-buyback authorization, as it benefits from improving performance.

The parent company of Applebee's and IHOP chains said its board approved a 5% bump to the dividend, bringing it to 92 cents from 87 cents, and more than doubled its previous authorization to $150 million. The company has a market value of about $1.7 billion.

DineEquity said it has earmarked most of its remaining cash after dividend payments for share repurchases.

The dividend increase and stock-buyback plans reflect "the confidence we have in our business model and long-term strategy,"said Chief Executive Julia Stewart.

California-based DineEquity has seen a trend of improving same-restaurant sales in recent quarters, with the metric climbing 6.2% and 1% at IHOP and Applebee's respectively in the latest quarter.

It has sold nearly all of its company-owned restaurants to franchisees as a way to generate more consistent revenue, and insulate itself from the volatility of commodity costs and consumer spending—a strategy other restaurant companies are also employing.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

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(END) Dow Jones Newswires

October 02, 2015 09:05 ET (13:05 GMT)