Exploring the Sustainability and Growth of Sanofi SA's Dividends
Sanofi SA (SNY, Financial) recently announced a dividend of $2.04 per share, payable on 2024-06-06, with the ex-dividend date set for 2024-05-09. 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 Sanofi SAs dividend performance and assess its sustainability.
What Does Sanofi SA Do?
Sanofi develops and markets drugs with a concentration in oncology, immunology, cardiovascular disease, diabetes, over-the-counter treatments and vaccines. However, the company's decision in late 2019 to pull back from the cardio-metabolic area will likely reduce the firm's footprint in this large therapeutic area. The company offers a diverse array of drugs with its highest revenue generator, Dupixent, representing just over 20% of total sales, but profits are shared with Regeneron. About 40% of total revenue comes from the United States and 25% from Europe. Emerging markets represent the majority of the remainder of revenue.
A Glimpse at Sanofi SA's Dividend History
Sanofi SA has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Sanofi SA's Dividend Yield and Growth
As of today, Sanofi SA currently has a 12-month trailing dividend yield of 3.79% and a 12-month forward dividend yield of 4.06%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Sanofi SA's annual dividend growth rate was 4.20%. Extended to a five-year horizon, this rate decreased to 3.10% per year. And over the past decade, Sanofi SA's annual dividends per share growth rate stands at 2.30%.
Based on Sanofi SA's dividend yield and five-year growth rate, the 5-year yield on cost of Sanofi SA stock as of today is approximately 4.42%.
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 2024-03-31, Sanofi SA's dividend payout ratio is 0.60.
Sanofi SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sanofi SA's profitability 8 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Sanofi SA's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Sanofi SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sanofi SA's revenue has increased by approximately 7.60% per year on average, a rate that outperforms approximately 54.99% 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, Sanofi SA's earnings increased by approximately 2.00% per year on average, a rate that outperforms approximately 37.56% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 5.20%, which outperforms approximately 39.74% of global competitors.
Conclusion and Next Steps
In conclusion, Sanofi SA's consistent dividend payments, robust dividend growth rate, sustainable payout ratio, high profitability, and solid growth metrics all contribute to a promising outlook for dividend investors. These factors make Sanofi SA an attractive option for those seeking steady income through dividends. For further exploration of high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
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.
