Rothmans Inc. Good or Bad for investment?

I am doing like a business assignment and I needed to know if Rothmans is a good place to invest. Their net income has increased from 93.5 - 99 (from 2005-2006). However their dividends paid went up by 157%. I am not sure if that is a good thing or bad thing.

Net sales= +2.4%

Oper. Exp= +0.25%

Interest Exp= -11.5%

Cap. Assets= +10.3%

Total Assets= -15%

Long term liabilities= +6.1%

Total Liabilites= +0.12

Those are some of the information I gathered from a research.

Rothmans Inc. Good or Bad for investment?performing arts center

ROC.TO

Dividends going up sharply indicates they have a lot of cash not in use. They may be preparing for a merger.

TORONTO (CP) - Rothmans Inc. (TSX: ROC.TO) is still on the watch for ways to expand abroad while cranking out steady profits and shareholder dividends in Canada despite fading cigarette sales volumes.

"We continue to be interested in opportunities for growth through an international tobacco acquisition," CEO John Barnett said Friday after reporting mild gains in revenue and earnings for Canada's only publicly traded tobacco company.

The company, with $172.2 million in cash and short-term investments, is "monitoring current and potential mergers-and-acquistion activity," Barnett told a conference call. He declined to specify how big an acquisition management would consider.

"It very much would depend on the quality of the assets and our assessment of the acquisition's ability to support a financing."

Rothmans reported on 5/18 it earned $99.8 million or $1.46 per diluted share in its "challenging" financial year ended March 31, compared with the prior year's $99.5 million, $1.45 per share.

Read... http://ca.news.finance.yahoo.com/s/18052...

Check into Yahoo Finance Canada for more info.

Of the hundreds of issues on the Toronto market, I am sure there must be better choices. I would be more interested in P/E ratio and % of market penetration.