CVS Caremark Gives Shareholders a 43% Raise

CVS Caremark Corporation (CVS) declared a quarterly dividend of $0.125 per share today, a 43% improvement over the $0.0875 paid each of the last four quarters. Today’s announcement makes 2011 the eighth consecutive year CVS has boosted its payout.

Shares of CVS opened at $35.23 this morning, where they now feature a 1.42% dividend yield. That’s a huge improvement over the 0.99% yield shareholders went to bed with last night. Over the last five years, the stock has carried an average yield of just 0.70%.

CVS Caremark has now increased its dividend rate by a total of 335% since 2003.

Analysts currently expect the company to earn $2.90 per share in 2011, putting its forward payout ratio at just 17.2%. The company has set a goal of achieving a payout ratio of 25-30% by 2015, so there’s much more potential upside here.

The first payout under the new rate carries an ex-dividend date of January 19.

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