GSK PLC's Dividend Analysis
Assessing the Sustainability and Prospects of GSK PLC's Dividend
GSK PLC (NYSE:GSK) recently announced a dividend of $0.41 per share, payable on 2024-04-11, with the ex-dividend date set for 2024-02-22. 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 GSK PLC's dividend performance and assess its sustainability.
What Does GSK PLC Do?
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In the pharmaceutical industry, GSK PLC stands as one of the largest companies by total sales. The company wields its might across several therapeutic classes, including respiratory, cancer, and antiviral, as well as vaccines. GSK PLC uses joint ventures to gain additional scale in certain markets like HIV.
A Glimpse at GSK PLC's Dividend History
GSK PLC has maintained a consistent dividend payment record since 1984, distributing dividends on a quarterly basis. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down GSK PLC's Dividend Yield and Growth
GSK PLC currently has a 12-month trailing dividend yield of 3.30% and a 12-month forward dividend yield of 3.46%, indicating an expected increase in dividend payments over the next year. However, with a yield near a 10-year low and lower than that of 23.82% of global competitors in the Drug Manufacturers industry, it may not be as attractive to income investors.
Over the past three years, GSK PLC's annual dividend growth rate was -17.70%, with a five-year rate of -10.10% per year, and a decade-long growth rate of -3.40%. The 5-year yield on cost for GSK PLC stock is approximately 1.94%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of GSK PLC's dividend is often gauged by its dividend payout ratio, which currently stands at 0.50. This moderate ratio suggests a balance between distributing earnings as dividends and retaining funds for future growth and stability. Additionally, GSK PLC's profitability rank of 7 out of 10, combined with a decade of positive net income, underscores its robust earnings capabilities.
Growth Metrics: The Future Outlook
GSK PLC's growth rank of 7 out of 10 indicates a favorable growth trajectory. Its average annual revenue per share growth of 6.90% outperforms 53.58% of global competitors. The 3-year EPS growth rate of 11.60% and a 5-year EBITDA growth rate of 0.80% further demonstrate GSK PLC's ability to grow its earnings, which is essential for maintaining dividends.
Concluding Thoughts on GSK PLC's Dividend Profile
In conclusion, GSK PLC's dividend payments, growth rates, and payout ratios, combined with its profitability and growth metrics, present a multifaceted picture for investors. While the dividend yield is not the highest in its industry, the company's consistent profitability and solid growth prospects may offer a balance for value investors seeking stable dividend income. As GSK PLC continues to navigate the complex pharmaceutical landscape, will its strategic initiatives and robust pipeline support a sustainable and growing dividend in the years to come? For those interested in high-dividend yield opportunities, GuruFocus Premium users can explore 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.
