Zoetis Inc. ZTS declared an increase of 14.5% in its quarterly dividend. The company announced a dividend of $0.095 per share for the first quarter of 2016, payable on Mar 1, 2016, to shareholders of record as on Jan 21, 2016. This represents an increase from $0.083 per share paid in each of the previous four quarters.
The new quarterly dividend comes to about 38 cents per share on a yearly basis, reflecting a forward yield of nearly 0.8% based on the raised dividend and the stock’s last closing price of $47.09 (Dec 16, 2015).
The increase in dividend is in line with the company’s strategy of returning excess capital to shareholders. In Dec 2014, the board of directors at Zoetis approved a 15% increase in the quarterly dividend to $0.083 per share. We are encouraged by the company’s policy to reward shareholders through regular dividends.
Meanwhile, the company continues to pursue lucrative internal and external growth opportunities. Zoetis acquired Abbott Laboratories’ ABT animal health assets for $255 million. This business is focused on the veterinary surgical market. It will strengthen Zoetis’ pain portfolio and sedation product portfolio and complement its diagnostic business. The company also acquired PHARMAQ in a bid to strengthen its core livestock business. We expect to see more of such acquisitions/deals at Zoetis in the near future, as the company continues to focus on its strategy of acquiring complementary businesses and products.
Zoetis currently carries a Zacks Rank #3 (Hold). A couple of other well-ranked stocks in the health care sector are Achillion Pharmaceuticals, Inc. ACHN and Corcept Therapeutics Incorporated CORT, both sporting a Zacks Rank #1 (Strong Buy).
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