Assessing the Sustainability of Gilead Sciences Inc's Upcoming Dividend
Gilead Sciences Inc (GILD, Financial) recently announced a dividend of $0.75 per share, payable on 2023-12-28, with the ex-dividend date set for 2023-12-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Gilead Sciences Inc's dividend performance and assess its sustainability.
What Does Gilead Sciences Inc Do?
Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer. Gilead Sciences Inc's acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of combination drug Harvoni, and the Kite, Forty Seven, and Immunomedics acquisitions boost Gilead Sciences's exposure to cell therapy and noncell therapy in oncology.
A Glimpse at Gilead Sciences Inc's Dividend History
Gilead Sciences Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gilead Sciences Inc's Dividend Yield and Growth
As of today, Gilead Sciences Inc currently has a 12-month trailing dividend yield of 3.68% and a 12-month forward dividend yield of 3.71%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Gilead Sciences Inc's annual dividend growth rate was 5.00%. Extended to a five-year horizon, this rate increased to 7.20% per year. Based on Gilead Sciences Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Gilead Sciences Inc stock as of today is approximately 5.21%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Gilead Sciences Inc's dividend payout ratio is 0.64.
Gilead Sciences Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gilead Sciences Inc's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Gilead Sciences Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is strong relative to its competitors.
Revenue is the lifeblood of any company, and Gilead Sciences Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gilead Sciences Inc's revenue has increased by approximately 7.10% per year on average, a rate that outperforms approximately 54.04% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Gilead Sciences Inc's earnings decreased by approximately -6.00% per year on average, a rate that outperforms approximately 27.08% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.90%, which outperforms approximately 46.41% of global competitors, indicates a solid financial base to support ongoing dividend payments.
Next Steps
In conclusion, Gilead Sciences Inc's upcoming dividend, consistent dividend growth rate, reasonable payout ratio, strong profitability, and solid growth metrics paint a reassuring picture for value investors focused on dividend income. These factors collectively suggest that Gilead Sciences Inc is well-positioned to maintain or potentially grow its dividend payments in the foreseeable future. Investors considering adding a healthcare sector stock with a reliable dividend to their portfolios might find Gilead Sciences Inc an attractive option. As you weigh your investment options, consider using tools like the High Dividend Yield Screener available to GuruFocus Premium users to identify other high-dividend yield stocks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
