Two High Dividend Stocks Maintain Their High Payouts

Merck

Pharmaceutical giant Merck & Co. (MRK: 38.37 -0.18%) announced today that they are maintaining their quarterly dividend payment of $.38 per share.

Merck’s current dividend yield now stands at 5.7%. Within the Dow Jones index, Merck now offers the fourth highest dividend yield among the 30 Dow component stocks. Only AT&T (T: 29.95 +0.54%), Verizon (VZ: 37.84 +0.75%) and DuPont (DD: 52.01 +1.19%) offer higher dividend yields.

The dividend will be payable on July 1, 2009 to shareholders of record as of June 8, 2009.

Since the beginning of the year, Merck’s shares have fallen over 12% after dropping almost 48% in 2008.

While Merck’s falling stock price has produced a very high dividend yield, there doesn’t appear to be any reason for the company to reduce their dividend payment in the near term. Wall Street analysts expect MRK to earn $3.21 per share this year, while their current annual dividend payout is only $1.52 per share. That results in a dividend payout ratio of less than 50%.

Frontline

Frontline (FRO: 4.92 +0.41%) announced today that they are maintaining their quarterly dividend payment of $.25 per share.

Frontline’s current dividend yield now stands at 4.4%.

The dividend will be payable on June 23, 2009 to shareholders of record as of June 9, 2009.

The dividend announcement came as FRO announced better than expected first quarter earnings results of $.97 per share. Wall Street was only expecting earnings of $.70 per share.

While Frontline wishes to maintain their high dividend payments, the company indicated that they are closely monitoring the financing market “whereby Frontline’s dedication to a high dividend payout ratio can be kept.”

“Our goal is to pay out surplus cash to our shareholders and to generate competitive returns for our shareholders with quarterly dividend payments. Our dividend payments are based on present earning, market prospects, current capital expenditure program as well as investment opportunities.”

The markets responded positively to the earnings beat and the dividend announcement, sending FRO’s shares up 4.9% to $23.95 in early morning trading. Since the beginning of the year, Frontline’s shares are down almost 19%.