Reynolds American Inc. (RAI) raised its quarterly dividend 8.2% as the tobacco company, like many other companies of late, looks to return value to shareholders.
The company boosted the dividend to 53 cents from its previous 49-cent level, bringing the annual rate to $2.12 a share.
"This increase aligns the dividend with the company's recently increased payout target and demonstrates the company's commitment to returning value to shareholders," said President and Chief Executive-elect Daniel Delen.
Many companies have been looking to return value to shareholders in recent months, using their cash piles to buy back stock or implement or boost dividends.
Earlier this month, Reynolds said its fourth-quarter profit climbed 44%, driven by higher pricing and productivity improvements.
Shares rose 0.8% to $33.50 in light premarket trading. As of Tuesday's close, the stock had risen 29% in the past year.
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