What Philip Morris International's Latest Dividend Increase Really Means for Investors
Dividend investors want their stocks to make regular increases in their quarterly payout, and their favorite stocks typically make predictable boosts at around the same time every year. During its decade-long history as an independent stock, Philip Morris International (NYSE: PM) has consistently announced higher dividend payouts each September. Unfortunately, the size of those increases has shrunk in recent years, and longtime shareholders were bracing for another paltry rise for 2017. Philip Morris ended up giving investors a little more than many expected, but the company still seems to see challenges going forward.
Philip Morris recently announced that its board of directors had increased the company's regular quarterly dividend by 2.9%. Beginning in October, shareholders in the tobacco giant will get $1.07 per share in cash every quarter. That marks a $0.03 per share rise from its previous payout of $1.04 per share.
The first reaction that some investors had at the news was surprise that the increase was slightly larger than most had feared. As you can see below, Philip Morris had started out giving its shareholders extremely strong dividend growth, with boosts in quarterly payments that typically amounted to double-digit percentage gains. Yet in each of the past two years, the dividend increase was just 2%.
Source: Fool.com