CVS Health will raise its quarterly shareholder payout by 27 percent, and the nation's second-largest drugstore chain also said Tuesday that it expects another year of earnings growth in 2015.
CVS Health drew national attention earlier this year when it announced a plan to stop selling tobacco products in its stores as it sharpens its focus on delivering health care. The company kicked the sales in September, and it said Tuesday during its annual meeting with analysts that the move will hurt its bottom line next year, but it still expects adjust earnings per share to grow more than 12 percent.
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The Woonsocket, Rhode Island, company forecast 2015 adjusted earnings to range between $5.05 and $5.19 per share.
Analysts expect, on average, earnings of $5.11 per share, according to FactSet.
CVS Health Corp. has more than 7,800 drugstores and also operates a large pharmacy benefits management business, which runs prescription plans for insurers, employer and other clients.
The company said that it will raise the quarterly cash dividend it pays shareholders to 35 cents per share from 27.5 cents. The new dividend will be payable Feb. 2 to shareholders of record on Jan. 22.
That tops the 22 percent dividend hike the company announced at last year's analyst meeting.
The company's board also approved a new stock buyback program for up to $10 billion that is expected to be completed over several years. That total will be added to the roughly $2.7 billion the company has left over from the buyback program it announced last year.
Shares of CVS Health closed at $89.87 on Monday and have climbed more than 25 percent so far this year, more than tripling the growth of the Standard & Poor's 500 index.