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Pfizer Inc. Message Board

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  • dennie_cunningham dennie_cunningham Jun 30, 2011 3:49 PM Flag

    Divy Increase?

    Thanks so much for your reply. I appreciate all the info you gave.

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    • You're welcome. One other thing that I should mention is that at one of the earnings conference calls last year, management mentioned that they would gradually increase the dividend until it was around the industry average of 40% of earnings.

      This year, with non-GAAP earnings of about $2.25 per share expected, the 80-cent payout is still somewhat below the 40% threshold. But management is expecting $2.30 next year and $2.40 appears about right for 2013.

      So if Pfizer continues raising by 8 cents a share per year, they will pay 88 cents in 2012 and 96 cents in 2013. The 96 cents in 2013 would be right at the 40% of earnings mark.

      So this is the likely expectation - 88 cents for 2012 and 96 cents for 2013.

      After 2013, the company should be increasing earnings by around 8% per year. That would be in the 20-cent-a-year area for years like 2014 and 2015. Interestingly enough, 40% of those gains also comes to 8 cents a year.

      So unless they change their policy, it's reasonable to think in terms of 8-cent annual dividend hikes every year through 2015.

 
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