CSL Ltd's Dividend Analysis
Assessing the Upcoming Dividend Prospects of CSL Ltd (CSLLY)
CSL Ltd (CSLLY) recently announced a dividend of $0.6 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-03-11. 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 CSL Ltd's dividend performance and assess its sustainability.
What Does CSL Ltd Do?
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CSL is one of the largest global biotech companies and has two main segments. CSL Behring either uses plasma-derived proteins or recombinants to treat conditions including immunodeficiencies, bleeding disorders, and neurological indications. Seqirus is now the world's second-largest influenza vaccination business and was acquired in fiscal 2015. CSL has a strong R&D track record, and the product portfolio and pipeline include nonplasma products as the firm continues to broaden its scope. Originally formed in Australia as a government-owned entity, CSL now earns roughly half its revenue in North America and a quarter in Europe.
A Glimpse at CSL Ltd's Dividend History
CSL Ltd has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annual basis. CSL Ltd has increased its dividend each year since 2009, earning the stock a reputation as a dividend achiever, a prestigious title awarded to companies that have consistently increased their dividend for at least the past 15 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down CSL Ltd's Dividend Yield and Growth
As of today, CSL Ltd currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.32%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, CSL Ltd's annual dividend growth rate was 7.70%. Extended to a five-year horizon, this rate increased to 9.90% per year. And over the past decade, CSL Ltd's annual dividends per share growth rate stands at an impressive 12.70%.
Based on CSL Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of CSL Ltd stock as of today is approximately 2.00%.
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 2023-12-31, CSL Ltd's dividend payout ratio is 0.46.
CSL Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks CSL Ltd's profitability 9 out of 10 as of 2023-12-31, 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. CSL Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and CSL Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. CSL Ltd's revenue has increased by approximately 11.90% per year on average, a rate that outperforms approximately 59.92% 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, CSL Ltd's earnings increased by approximately 0.30% per year on average, a rate that outperforms approximately 44.89% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 5.20%, which outperforms approximately 44.7% of global competitors.
Next Steps
In conclusion, CSL Ltd's dividend payments, growth rate, payout ratio, profitability, and growth metrics collectively present a strong case for the company's financial health and its ability to sustain and potentially increase its dividend payouts. The consistent increase in dividends, coupled with robust profitability and a favorable growth outlook, positions CSL Ltd as a compelling option for value investors with an eye on steady income streams. As the company continues to navigate the biotech landscape, investors should consider these factors when making investment decisions. For further dividend investment opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using 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.
This article first appeared on GuruFocus.
