GSK PLC's Dividend Analysis
Exploring the Sustainability and Growth of GSK PLC's Dividends
GSK PLC (NYSE:GSK) recently announced a dividend of $0.38 per share, payable on July 11, 2024, with the ex-dividend date set for May 16, 2024. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Utilizing the data from GuruFocus, let's delve into GSK PLC's dividend performance and assess its sustainability.
What Does GSK PLC Do?
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In the pharmaceutical industry, GSK ranks as one of the largest firms by total sales. The company wields its might across several therapeutic classes, including respiratory, cancer, and antiviral, as well as vaccines. GSK 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 for tracking historical trends.
Breaking Down GSK PLC's Dividend Yield and Growth
As of today, GSK PLC currently has a 12-month trailing dividend yield of 3.24% and a 12-month forward dividend yield of 3.32%, indicating expectations of increased dividend payments over the next 12 months. However, GSK PLC's dividend yield of 3.24% is near a 10-year low and underperforms 21.71% of global competitors in the Drug Manufacturers industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, GSK PLC's annual dividend growth rate was -17.70%. Extended to a five-year horizon, this rate increased to -10.10% per year. And over the past decade, GSK PLC's annual dividends per share growth rate stands at -3.40%.
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 March 31, 2024, GSK PLC's dividend payout ratio is 0.52.
GSK PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks GSK PLC's profitability 7 out of 10 as of March 31, 2024, 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. GSK PLC'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 GSK PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. GSK PLC's revenue has increased by approximately 6.90% per year on average, outperforming approximately 52.34% 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, GSK PLC's earnings increased by approximately 15.00% per year on average, outperforming approximately 56.87% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.10%, outperforms approximately 31.96% of global competitors.
Next Steps
Considering GSK PLC's consistent dividend payments, the recent trends in dividend growth rates, payout ratio, profitability, and growth metrics all suggest a nuanced view of its future dividend sustainability. Investors should weigh these factors when considering GSK PLC as a potential investment for dividend income. For those looking to explore further, 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.
