Dividends4Life: Investors clamor for Amgen dividend

Investors clamor for Amgen dividend

Posted by D4L | Friday, March 18, 2011 | | 0 comments »

Amgen Inc (AMGN.O), a biotechnology company whose fastest-growing days may be history, may be leaning toward paying its first dividend as investors clamor for distribution of its massive cash holdings. The California biotech held more than $17 billion in cash and marketable securities at the end of last year.

Recent surveys by ISI Group and Sanford Bernstein suggest that Amgen should pay out as much as $1.25 billion a year to investors, many of whom are concerned that the company might deploy its cash in an ill-advised acquisition. That would represent a yield of 2.5 percent, compared with yields of between 4 percent and 5 percent for traditional drugmakers like Pfizer Inc (PFE.N) and Eli Lilly (LLY.N). "The biggest issue investors have is their use of capital," Sanford Bernstein analyst Geoffrey Porges said of Amgen. "Share buybacks don't appear to have created much value."

Source: Reuters

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