Pfizer, Inc. Increases Dividend By 7% to 30 Cents.

America's largest healthcare company has planned on increasing its dividend by 7% in efforts to keep its shareholders happy.

In an attempt to move its business to a low-tax jurisdiction, Pfizer, Inc. has decided to merge with Allergan PLC in a $1.6 billion bid. Many believe that this merger is one of the biggest tax inversion deals in the history so far due to which it has managed to receive a lot of criticism from the US politicians.

Presently company’s on their foreign income pay income tax of 35% because of which the United States based companies mostly end up paying double tax on their foreign income. This attempt of parking their foreign income overseas many companies has started to take this route of settling their core business outside of the country.

In 2013, the pharmaceutical corporation, Pfizer managed to earn $17 billion on its foreign sales which make up 80% of the sales in the United States. While on the other hand, when internationally the pharma company was making billions, in the United States it was incurring losses for five consecutive years.

The chief executive officer of the pharma company Ian Read has continuously called the tax system of the country “hugely disadvantageous” when it comes to competing with international healthcare companies.

Pfizer stock, as of previous trading is up by 0.31% and is now trading at $32.26 in after hour trading sessions. This increase happened after the healthcare company had announced an increase in its quarterly dividends. In the first quarter, the company announced a dividend of 30 cents for each share which showed a 7% increase in its previous dividend price of 28 cents. Ian Read, on the dividend matter, made a statement that this increase in its quarterly dividend is a testament to the company’s continued commitment and working towards enhancing its shareholders value and furthermore, shows how much confidence the company hold in the its business.  

The CEO further added that the pharmaceutical company’s main aim had always been to maximize the shareholder’s returns and the main ingredient to do so is the dividends as they are the main component. The merged companies will be led by the present CEO of Pfizer while the Dublin based, Allergan’s chief executive officer, Brent Saunders will serve as the chief operating officer of both the companies.

As of October 2015, America’s largest pharmaceutical company had reported better than expected earnings results and for its upcoming years has better expectations as the company has clearly benefited a number of new drugs in the market which came from the acquisition of Hospira.