NEW YORK (
said Monday its board approved an 11.1% increase of its quarterly
cash dividend to 20 cents a share from 18 cents.
Pfizer said the dividend is payable on March 1, 2011 to shareholders of record on Feb. 4.
The increased dividend will bring Pfizer's annualized yield to around 4.7% based on current share prices.
The stock rose 1% to $17.19 in regular trades on Monday. It ticked higher in after-hours action, adding 4 cents to $17.23 on volume of 1.12 million, according to
. Year-to-date, shares of the Dow component are down 6.4% vs. a gain of 9.6% for the blue-chip index.
Dividend activity has picked up in recent months as companies begin to regain some sense of stability in the state of the economy, and visibility of future earnings growth.
iShares Dow Jones Select Dividend
, an exchange-traded fund that tracks the
Dow Jones U.S. Select Dividend Index
, is up 13.3% so far in 2010, and up 12.3% year-over-year. The
iShares Dow Jones International Select Dividend Index Fund
ETF is up 7% year-to-date, and up 6.1% from a year ago.
"This dividend increase is a testament to our commitment to enhance shareholder value and reflects continued confidence in our business," said Pfizer CEO Ian Read in a press release. "While the dividend level remains a decision of the board and will continue to be evaluated in the context of future business performance, barring significant unforeseen events, we continue to target a dividend payout ratio comparable to the current industry average of approximately 40% in about three years."
Pfizer's first-quarter cash dividend will mark the company's 289th consecutive quarterly payout.
The company halved its dividend in 2009, from 32 cents to 16 cents, as a means of financing its acquisition of
Separately Monday, Pfizer said it tapped board member George Lorch to be its nonexecutive chairman of the board, effective immediately.
The 68-year-old has served as an independent director for Pfizer since 2000 and previously was chairman of the board's compensation committee.
Earlier this month, Pfizer announced the abrupt resignation of CEO Jeffrey Kindler. He was succeeded by the company's head of global pharmaceuticals, Ian Read.
-- Written by Miriam Marcus Reimer in New York.
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