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Philip Morris dividend up
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August 28, 1996: 9:56 p.m. ET
Nation's largest tobacco firm raises dividend by 20 percent
From Correspondent Allan Dodds Frank
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NEW YORK (CNNfn) -- Philip Morris, the nation's largest cigarette manufacturer, raised its dividend by 20 percent Tuesday, increasing the quarterly payout to $1.20 per common share.
The move -- Philip Morris' 32nd dividend hike in the last 29 years -- pushed the company's yield at current stock prices to more than 5 percent, the highest among the Dow 30 industrial stocks.
Analysts say the consumer powerhouse can afford the move, since Philip Morris -- a tobacco, beer and cheese giant -- is expected to earn $7.68 a share on revenues of almost $70 billion.
"As analysts, we know that there are these smoking and health issues," said tobacco analyst John Nelson, "but it is always reassuring to hear from the company that irrespective of what is going on, (it is) doing well enough that (it) can raise the dividend 20 percent. Not many companies can do that."
On the New York Stock Exchange, Philip Morris rose on word of the dividend hike, but later eased back to close down 5-8 at 91-1/4.
The White House helped tobacco stocks recently by suggesting that if firms take steps to cut teenage smoking, the administration might modify plans to have the Food and Drug Administration regulate nicotine as a drug.
White House Chief of Staff Leon Panetta also said a deal could cap liability lawsuits against cigarette makers. (108K WAV) or (108K AIFF)
At a Philip Morris board meeting Wednesday, directors -- including Citicorp Chairman John Reed and former Secretary of Defense Harold Brown -- declined to comment on the matter.
Philip Morris security personnel moved another director's limousine into a garage to shield the board member from reporters' questions.
So far, Philip Morris has only issued a statement saying that any legislative solution to tobacco issues would present significant -- if not insurmountable -- difficulties.
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