ICN Switches Dividends to All Cash, Raises Return

ICN Pharmaceuticals Inc., aiming to please investors, said it will quit paying dividends partially in stock and will revert to paying cash only.

The drug company also upped its quarterly dividend by 10% to 7.7 cents from 7 cents a share. The dividend will be payable on April 10 to shareholders of record March 28.

But shareholders didn’t seem impressed. ICN stock closed in New York Stock Exchange trading Thursday at $23.125 a share, down 12.5 cents.

David C. Watt, the company’s general counsel, said ICN decided to return to cash dividends after surveying investors nine months ago and consulting financial advisors. He also cited the company’s strong financial results.

The company earned $67.3 million, or $2.20 a share, on revenue of $508 million last year.

ICN began paying stock dividends when it was formed by a merger of four affiliated companies in November 1994. The company copied that policy from the largest of the former affiliates, SPI Pharmaceuticals Inc.

More than three years ago, SPI began issuing stock dividends to supplement its meager cash dividend. Late in 1994, SPI slashed its quarterly cash dividend to 6.25 cents from 26.25 cents a share, citing the effects on its Belgrade subsidiary of international sanctions against Yugoslavia. A sell-off in the stock ensued.

About a month later, SPI said it would issue stock dividends to sweeten the payout. ICN picked up the policy after the merger.