DOW JONES NEWSWIRES
Lorillard Inc. (LO) approved a 16% increase to its quarterly
dividend, returning cash to shareholders as profits rise in the
tobacco industry.
Many companies have been looking for ways to spend excess cash
after stockpiling it in the wake of the recession, prompting a
large number of dividend increases and stock buybacks in recent
months.
The third-largest U.S. cigarette-maker lifted its quarterly
dividend to $1.30 from $1.125 cents a share, an increase that will
cost an additional $26 million a quarter.
The boost was the company's second increase in the past six
months and its third since Lorillard became an independent publicly
traded company in June 2008.
The move came a day after rival Reynolds American Inc.'s (RAI)
own 8.2% dividend boost to 53 cents, fresh off a 44% quarterly
profit increase earlier this month.
Lorillard posted a 7% higher fourth-quarter profit on strong
volume growth and market-share gains for its Newport menthol and
nonmenthol cigarettes. Larger cigarette-maker Altria Group Inc.
(MO) also reported improved profits for the quarter on higher
margins.
Shares of Lorillard edged up 0.4% to $78.11 Thursday.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com