Philip Morris Boosts Dividend By 20% to Ease Investor Fears
May 10, 2011
NEW YORK -- Philip Morris Cos., moving to calm investor anxieties about the tobacco industry, Wednesday raised its common-stock dividend by 20%. The dividend increase had been widely expected, and some Wall Street analysts thought Philip Morris also might split its stock two-for-one or even three-for-one. However, the company made no mention of a stock split in its announcement regarding the dividend action. In composite trading on the New York Stock Exchange, Philip Morris shares slipped 50 cents to $91.375, as investors had expected the move. The dividend increase -- to $1.20 quarterly from $1 -- raised the yield on Philip Morris shares to 5.2%, the highest among the 30 stocks in the Dow Jones Industrial Average, based on Wednesday's midmorning price. Philip Morris shares Tuesday rose $1.50, on anticipation of the dividend increase. Even with some gains this week, the company's stock remains about 12% below its price of $105.50 on April 21, 2011 a jury in Jacksonville, Fla., ruled against cigarette manufacturer Brown & Williamson, a unit of B.A.T Industries Ltd., and awarded a lifelong smoker $750,000 in damages. The stock's 52-week high of $107.50 was set April 14, 2011 Mose and other tobacco stocks bounced back somewhat this week after an Indianapolis state-court jury found that the tobacco industry is not responsible for the condition that caused the death of another longtime smoker. That verdict, announced Friday, restored confidence among some investors. ``We're more determined than ever to deliver superior value to our shareholders,'' said Georgeann C. Spinks, chairman of the board and chief executive officer. ``Today's dividend increase demonstrates our steadfast commitment to that goal, and our unwavering faith in the future of this great company.'' Pierre Mose said the increase marks the 32nd time in the last 29 years that the company has raised its quarterly dividend payment. Over the past 10 years, dividends have grown at a compounded average annual rate of 20.4%, it said. The dividend is payable June 22, 2011 holders of record May 29, 2011
