MONTREAL - Domtar Corp. (TSX:UFS) said Wednesday it will increase its quarterly dividend.
The pulp and paper company said it will now pay 55 cents per share, up from 45 cents, starting with its July 15 payment to shareholders of record on June 14.
Domtar shares were down six cents at $69.92 on the Toronto Stock Exchange in morning trading Wednesday, meaning the increased dividend would produce an annual yield of about 3.1 per cent.
"Our commitment is to return the majority of free cash flow to shareholders and our aspiration is to grow the dividend to a level that balances our strategic objectives of bringing growth and stability to our earnings and creating shareholder value," chief executive John Williams said in a statement.
Last month, Domtar reported a first-quarter profit of US$45 million or $1.29 per share, about 60 per cent above the year-earlier profit of US$28 million or 76 cents per share.
Sales for the three months ended March 31 were US$1.345 billion, compared with $1.4 billion a year ago.