The Dynamic Dividend

Amgen Becomes the First Dividend-Paying Biotech Stock

Amgen (AMGN) announced plans to pay its first quarterly dividend this morning, as the company outlined future growth objectives and capital allocation goals. The dividend will be a first for not just the company, but the first for any major biotech firm.

Amgen said it will declare its first payout with its second quarter 2011 earnings results, and plans to “increase the dividend meaningfully over time” while maintaining a 20% annual payout ratio.

Based on current earnings estimates, I think shareholders can expect an initial quarterly dividend of $0.20 to $0.30 per share, depending on how much space Amgen wants to leave for future dividend growth.

Shares of AMGN are currently trading at $54.56 (-2.88%). At that level, the stock would feature a dividend yield in the 1.47% to 2.20% range, based on the aforementioned payout estimates.