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Philip Morris Boost Shareholder Return, Hikes Dividend
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Philip Morris International Inc.’s (PM - Free Report) board of directors announced a 2% hike in its quarterly dividend to $1.04 per share. The annualized dividend now amounts to $4.16 per share with a dividend yield of 4.2%, based on the last closing price of $98.62.
The new dividend will be paid on Oct 13 to its shareholders on record as of Sep 28, 2016. Last year also, the company increased its dividend by 2%.
The cigarette maker regularly returns value to its shareholders and since 2008, when it became a public company, it has increased the annual dividend for nine consecutive times, displaying a total increase of 126.1% or a compound annual growth rate of 10.7%. The increase in dividend is seen as a part of the company’s strategy to win back investors’ confidence in the stock. This is so because the company did not announce any share buyback program in its second-quarter 2016 conference call and neither did it repurchase shares in first-half 2016.
Traditionally, tobacco companies have always attracted investors with high yielding returns. These companies maintain consistent earnings growth by trimming expenses, seeking income abroad and through mergers and acquisitions.
Philip Morris is not the only tobacco stock who is geared to maximize shareholders return. In Aug 2016, Altria Group Inc. (MO - Free Report) announced an 8% hike in its quarterly dividend to 61 cents per share. While Altria has a dividend yield of 3.9%, another tobacco company Reynolds American, Inc. pays dividends that yield more than 3.9%. Vector Group Ltd. (VGR - Free Report) , a smaller American cigarette company that owns the Pyramid and Eagle 20's brands, has a striking dividend yield of 7%.
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Philip Morris Boost Shareholder Return, Hikes Dividend
Philip Morris International Inc.’s (PM - Free Report) board of directors announced a 2% hike in its quarterly dividend to $1.04 per share. The annualized dividend now amounts to $4.16 per share with a dividend yield of 4.2%, based on the last closing price of $98.62.
The new dividend will be paid on Oct 13 to its shareholders on record as of Sep 28, 2016. Last year also, the company increased its dividend by 2%.
The cigarette maker regularly returns value to its shareholders and since 2008, when it became a public company, it has increased the annual dividend for nine consecutive times, displaying a total increase of 126.1% or a compound annual growth rate of 10.7%. The increase in dividend is seen as a part of the company’s strategy to win back investors’ confidence in the stock. This is so because the company did not announce any share buyback program in its second-quarter 2016 conference call and neither did it repurchase shares in first-half 2016.
Traditionally, tobacco companies have always attracted investors with high yielding returns. These companies maintain consistent earnings growth by trimming expenses, seeking income abroad and through mergers and acquisitions.
Philip Morris is not the only tobacco stock who is geared to maximize shareholders return. In Aug 2016, Altria Group Inc. (MO - Free Report) announced an 8% hike in its quarterly dividend to 61 cents per share. While Altria has a dividend yield of 3.9%, another tobacco company Reynolds American, Inc. pays dividends that yield more than 3.9%. Vector Group Ltd. (VGR - Free Report) , a smaller American cigarette company that owns the Pyramid and Eagle 20's brands, has a striking dividend yield of 7%.
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Philip Morris, which has an expected long-term earnings growth rate of 8.9%, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
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