Gilead Sciences Inc's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of GILD
Gilead Sciences Inc (NASDAQ:GILD) recently announced a dividend of $0.77 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-14. 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?
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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'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'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 4.02% and a 12-month forward dividend yield of 4.13%. 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 3.30%. Extended to a five-year horizon, this rate increased to 5.50% 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 5.25%.
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, Gilead Sciences Inc's dividend payout ratio is 0.50.
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 8 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. Gilead Sciences Inc'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 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 3.30% per year on average, a rate that underperforms approximately 61.16% 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 increased by approximately 24.50% per year on average, a rate that underperforms approximately 32.13% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.80%, which underperforms approximately 59.67% of global competitors.
Conclusion: Evaluating Gilead Sciences Inc's Dividend Prospects
The analysis of Gilead Sciences Inc's upcoming dividend, historical dividend performance, payout ratio, and growth metrics presents a multifaceted view of its investment potential. With a consistent dividend history and a solid profitability rank, Gilead Sciences Inc appears to have a stable foundation for sustaining its dividend payments. The dividend growth rate and yield on cost offer an attractive proposition for income-focused investors. However, the growth metrics suggest there is room for improvement when compared to industry peers. Investors will do well to consider these factors in light of their investment strategy and goals. 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.
