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Insurer Anthem hikes quarterly shareholder payout

February 19, 2016

Anthem Inc. has bumped up the quarterly dividend it pays shareholders by 4 percent, opting for a much smaller increase than its previous hike, as the health insurer works to close its $48 billion acquisition of Cigna Corp.

The Indianapolis-based company said after markets closed Thursday that its board declared a new dividend of 65 cents per share, up from the previous payout of 62.5 cents per share. The dividend will be payable March 25 to shareholders of record on March 10.

The Blue Cross-Blue Shield insurer's new payout adds up to an annual dividend of $2.60 per share, which produces a yield of about 2 percent when compared with its stock price.

Anthem Inc. had hiked its quarterly payout nearly 43 percent at the start of 2015 to keep up with the company's rising stock price. This year, analysts and investors were expecting more restrained dividend growth, as insurer stock growth cooled and the companies put their money behind major acquisitions.

Anthem's Cigna deal is still going through regulatory review, and the insurer expects it to close later this year.

Leerink analyst Ana Gupte said in a research note that she's feeling more positive about Anthem, as the insurer increased its dividend yield "amid a mega transaction."

Competitor Humana Inc. also said Thursday that it was keeping its dividend at 29 cents per share. Humana is being acquired by another insurer, Aetna Inc., and those companies have agreed to keep their payouts stable until the deal closes.

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