Pfizer Lives Up To Dividend Challenge (PFE, MRK)

Pfizer, Inc. (NYSE: PFE) managed to play catch-up with Merck & Co., Inc. (NYSE: MRK) on the high dividend game.  The difference between the two dividend hikes, other than that Pfizer’s hike was today, is that Pfizer had already been raising its dividend to get back closer to its old payout while Merck’s hike was the first hike since the Vioxx scandal.

Today’s dividend raise was by 10%, up from $0.20 to $0.22 per share per quarter.  The new Pfizer dividend yield based upon a $0.88 annualized payout and a $20.33 share price is 4.32%. 

Another help was that Pfizer said it was authorizing up to $10 billion for share buybacks, which it may conduct in the open market or in private negotiated transactions. 

Pfizer’s dividend hike should have been expected.  Late last week we even published a note telling investors that a dividend hike was likely as soon as this week.  The company’s market cap is still more than $155 billion and the loss of the Lipitor patent had been known about for years.

Shares are trading lower with the broad market this Monday by 1.2% to $20.33 and the 52-week trading range is $16.63 to $21.45.  The company’s acquisition trail has been a massive one.