Aspiring for Aspen Pharmacare Holdings Ltd's Dividend: A Comprehensive Analysis
An in-depth look at Aspen Pharmacare Holdings Ltd's dividend performance, sustainability, and future prospects
Aspen Pharmacare Holdings Ltd(APNHY) recently announced a dividend of $0.18 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-09-21. 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 deep dive into Aspen Pharmacare Holdings Ltd's dividend performance and assess its sustainability.
What Does Aspen Pharmacare Holdings Ltd Do?
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Aspen Pharmacare Holdings Ltd is a South African-based global specialty pharmaceutical company with a commercial footprint covering more than 50 countries and complex manufacturing capabilities in both API and finished dose form. The company focuses on a broad range of post-patent, branded medicines and domestic brands spanning many therapeutic areas. The group's commercial pharmaceuticals business comprises Sterile Focus and Regional Brands. Aspen has invested in strategically relevant manufacturing capacity and has capabilities across biological and chemical APIs, orals, liquids, topicals and steriles, at 23 manufacturing facilities on 6 continents.
A Glimpse at Aspen Pharmacare Holdings Ltd's Dividend History
Aspen Pharmacare Holdings Ltd has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aspen Pharmacare Holdings Ltd's Dividend Yield and Growth
As of today, Aspen Pharmacare Holdings Ltd currently has a 12-month trailing dividend yield of 2.06% and a 12-month forward dividend yield of 2.10%. This suggests an expectation of increasing dividend payments over the next 12 months.
Over the past three years, Aspen Pharmacare Holdings Ltd's annual dividend growth rate was -6.00%. Based on Aspen Pharmacare Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Aspen Pharmacare Holdings Ltd stock as of today is approximately 2.06%.
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 2022-12-31, Aspen Pharmacare Holdings Ltd's dividend payout ratio is 0.25.
Aspen Pharmacare Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aspen Pharmacare Holdings Ltd's profitability 7 out of 10 as of 2022-12-31, 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. Aspen Pharmacare Holdings Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Aspen Pharmacare Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aspen Pharmacare Holdings Ltd's revenue has increased by approximately 3.10% per year on average, a rate that underperforms than approximately 60.04% 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, Aspen Pharmacare Holdings Ltd's earnings increased by approximately 57.30% per year on average, a rate that underperforms than approximately 9.54% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.20%, which underperforms than approximately 60.9% of global competitors.
Next Steps
Considering Aspen Pharmacare Holdings Ltd's consistent dividend payments, moderate growth rate, low payout ratio, high profitability, and promising growth metrics, it appears that the company's dividend is sustainable in the long run. However, investors should continue to monitor these factors to ensure the company's ability to maintain its dividend payments. Is Aspen Pharmacare Holdings Ltd a good fit for your portfolio? The answer lies in your investment goals and risk tolerance.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
