Laboratory Corp of America Holdings's Dividend Analysis
A Comprehensive Review of the Company's Dividend Performance and Sustainability
Laboratory Corp of America Holdings (NYSE:LH) recently announced a dividend of $0.72 per share, payable on 2023-12-12, with the ex-dividend date set for 2023-11-07. 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 delve into Laboratory Corp of America Holdings's dividend performance and assess its sustainability.
Understanding Laboratory Corp of America Holdings
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Laboratory Corp. of America is one of the nation's two largest independent clinical laboratories, with roughly 20% of the independent lab market. The company operates approximately 2,000 patient-service centers, offering a broad range of 5,000 clinical lab tests, ranging from routine blood and urine screens to complex oncology and genomic testing.
Exploring Laboratory Corp of America Holdings's Dividend History
Laboratory Corp of America Holdings has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding Laboratory Corp of America Holdings's Dividend Yield and Growth
As of today, Laboratory Corp of America Holdings currently has a 12-month trailing dividend yield of 1.37% and a 12-month forward dividend yield of 1.37%. This suggests an expectation of same dividend payments over the next 12 months.
Based on Laboratory Corp of America Holdings's dividend yield and five-year growth rate, the 5-year yield on cost of Laboratory Corp of America Holdings stock as of today is approximately 1.37%.
Assessing Dividend Sustainability: 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 2023-09-30, Laboratory Corp of America Holdings's dividend payout ratio is 0.30.
Laboratory Corp of America Holdings's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Laboratory Corp of America Holdings's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Future Outlook: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Laboratory Corp of America Holdings'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 Laboratory Corp of America Holdings's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Laboratory Corp of America Holdings's revenue has increased by approximately 11.50% per year on average, a rate that outperforms than approximately 51.74% 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, Laboratory Corp of America Holdings's earnings increased by approximately 25.10% per year on average, a rate that outperforms than approximately 65.54% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.10%, which outperforms than approximately 57.36% of global competitors.
Conclusion
In conclusion, Laboratory Corp of America Holdings has shown a commendable dividend performance with consistent payments and a reasonable dividend yield. The company's low payout ratio and high profitability rank indicate a strong capacity to sustain these dividends. Furthermore, robust growth metrics, including revenue per share and EPS growth rate, suggest a promising future for the company, further enhancing its dividend prospects. As such, Laboratory Corp of America Holdings presents a compelling case for dividend-focused investors.
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.
