Pharma Sector Brings A Couple Of Pre-Christmas Dividend Hikes

Pharma Sector Brings A Couple Of Pre-Christmas Dividend Hikes

About: Pfizer’s (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), Becton Dickinson (NYSE: BDX), Bristol-Myers Squibb (NYSE: BMY), Abbott Labs (NYSE: ABT), JNJ, Merck (NYSE: MRK), Eli Lilly (NYSE: LLY) and GlaxoSmithKline (NYSE: GSK)

Perhaps Pfizer’s (NYSE: PFE) dividend increase touched earlier this touched off a trend in the pharmaceuticals sector. The biggest U.S. drugmaker boosted its quarterly payout to 18 cents a share from 16 cents after completing its mega-acquisition of Wyeth and some analysts are expecting more to come from the drug giant in 2010 regarding the payout. Johnson & Johnson (NYSE: JNJ) and Becton Dickinson (NYSE: BDX) are other pharma names to boost their payouts in recent months and Bristol-Myers Squibb (NYSE: BMY) joined the fray earlier this week with a 3.2% dividend hike that will take its quarterly payout to 32 cents a share.

Not surprisingly, Bristol-Myers cited its strong cash flow and the expectation for continued strength in the free cash department as reasons for the dividend hike. The new dividend will be payable on March 3 to shareholders of record on February 8.

The pharma sector remains home to some reliable dividend payers and juicy yields. Pfizer is back on the right track and the Bristol-Myers announcement is a nice stocking-stuffer for income investors, but it is also worth noting that these two companies, along with Abbott Labs (NYSE: ABT), JNJ, Merck (NYSE: MRK), Eli Lilly (NYSE: LLY) and GlaxoSmithKline (NYSE: GSK) all yield 3% or higher.

Even West Pharmaceutical Services (NYSE: WST), a mid-cap medical device maker that is dwarfed in size by the aforementioned names, got in on the dividend raising action, boosting its quarterly payout to 16 cents a share for 2010 from 15 cents. Good news to be sure, but we’ll lean in favor of large cap pharma for now.