Call it a tale of two dividends. For the first time in 42 years, Pfizer is not hiking its quarterly dividend. Hardly shocking in today's economy and today's pharma industry, especially as the company is prepping for the loss of Lipitor. Given all that, spokeswoman Joan Campion told Forbes that it's "most prudent" to continue the dividend at its current level.
And what level would that be? Thirty-two cents a share during each quarter of 2009. That's still a 7.6 percent payout over that 12 months, still among the highest in pharma, and still a powerful reason for shareholders to hang tight. At least one investor, however, wasn't impressed. Hedge funder Michael Krensavage wondered why Pfizer couldn't dig into its cash-filled pockets to boost the dividend by "a penny or two." But as the WSJ Health Blog notes, Pfizer may be keeping its powder dry for any buyout bargains that emerge.
Meanwhile, Eli Lilly took the opposite approach, raising its payout by 2 cents per share to 49 cents. It's the company's 42nd annual increase, according to Dow Jones, and it puts the annual rate at $1.96 per share. In increasing its dividend, Lilly is defying a downward trend across many industries; companies have been cutting their payouts to conserve capital, Dow Jones notes. Financial services firms, of course, have cut or eliminated their dividends altogether, but so have companies in many other sectors.