raised its dividend by 20% in what amounts to a minor cash injection for its strapped corporate parent,
The company, which is 50% owned and 97% controlled through voting stock by Altria, raised its quarterly payout to 18 cents from 15 cents. It said a debt-reduction initiative has freed up cash to return to shareholders.
Altria owns about half of Kraft's outstanding common shares, which currently stand at about 551 million, so it stands to collect an extra $6.7 million a quarter from the increase.
Altria is currently in court trying to overturn a requirement that it put up a $10 billion bond in order to appeal a judgment in a false-advertising case against it. The company has previously warned that it doesn't have enough money to post the bond and ratings agencies have warned of dire consequences if it loses the case, which is in the Illinois court system.
Kraft was recently down 23 cents, or 0.8%, to $29.09. Altria was down 11 cents, or 0.3%, to $39.89.
Typically, Altria raises its own dividend in late August. Analysts have recently predicted this year's increase will be less than usual because of the litigation and a tough U.S. cigarette market.