Lorillard (LO) Increases it’s Dividend

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Lorillard, Inc. (LO), the third largest manufacturer of cigarettes in the United States, announced today that its Board of Directors approved a 7% increase in the quarterly dividend on its common stock from $0.615 per share to $0.66 per share.  The dividend is payable on March 10, 2015 to stockholders of record as of March 2, 2015.

Those boosts are music to my ears. More cash in my pocket and I’m starting to have a pretty impressive dividend % on my purchase price, though it wasn’t all that long ago. Lorillard has boosted dividends now 6 years in a row, with huge cumulative increases since 2008.

I know not everyone is a believe in Vice Stocks (particularly cigarettes), however I try to stay agnostic. I believe in letting people do what they want and being willing to deal with those consequences. If I didn’t invest in things I personally avoid, I wouldn’t be able to own Coca Cola, Kellog, Nestle, McDonalds or dozens of others. Each to their own, in terms of investing philosophy.

My purchase price was 47.76, giving me a dividend payout of (.66 x 4) / 47.76 = 5.53%. I also have chosen to Drip this one, so the number of shares I purchased 1.5 shares since I started. I wish I had bought 3x what I did at the time.

I also think owning cigarette companies is a way to buy incredibly solid, large, cash gushers, while holding an option that could create amazing levels of growth over the next 20 years. What am I talking about? Marijuana. When the Federal government finally legalizes, I imagine you’ll see all the major tobacco producers immediately shift huge amounts of resources into a sector that is almost identical to what they are already incredibly skilled and accomplished at.