PARISMILAN, Feb 15 Reuters Shares in Renault hit sevenmonth highs and rival Stellantis shot to record peaks on Thursday after the carmakers pledged to reward investors with a big jump in annual dividend and a share buyback worth billions of euros.

The bumper payouts helped soothe investors39; concerns over the outlook for European carmakers as they struggle with competition from cheaper Chinese rivals, higher costs and tepid demand while consumers tighten their budgets due to rising costs of borrowing.

For Stellantis, the return of cash was a relief after agreeing big pay increases to end a prolonged strike by workers in North America last year, which knocked profits in the second half.

At Renault, the stronger cash position and margin growth delivered in 2023 results on Wednesday night were the latest sign that a turnaround under Chief Executive Luca de Meo is bearing fruit.

Renault shares were last up more than 7 at 1041 GMT, set for their best day in more than a year and having touched their highest since July. That compares with a 0.7 rise in Paris39; benchmark CAC 40.

Renault also said it would propose a dividend of 1.85 euros for 2023, up from a payout of 0.25 euro for 2022, and much better than the 1.4 euros expected by analysts.

Meanwhile, rival Stellantis rose 4.1 to a record high despite its warning of a turbulent 2024. The world39;s third largest automaker by revenues, whose brands include Fiat, Jeep and Citroen, said it will launch a share buyback…