Philip Morris Expected to Raise Dividend Again

Who says the cash dividend is dead? Philip Morris Cos. directors are expected to raise the company’s dividend by as much as 9.5% today, reflecting strong earnings growth at the largest cigarette maker, analysts said.

Philip Morris currently pays a per share dividend of $2.12 a year, or 53 cents a quarter. With the stock (ticker symbol: MO) at $47.60 on Tuesday on the New York Stock Exchange, the current annualized dividend yield is 4.4%--more than many money market mutual funds now pay.

Many U.S. companies have stopped raising dividends as profit growth has waned amid the economic slowdown. But Philip Morris has boosted its dividend every year but two during the last decade. Chief Financial Officer Louis Camilleri said in February that Philip Morris would keep raising its dividend at the same rate as annual earnings growth--expected to be in the 9% range this year.

“It’s sort of an end-of-summer rite of passage” for the company to raise its dividend, said Prudential Securities analyst Robert Campagnino.

Philip Morris spokesman Tim Kellogg declined to comment.