Assessing Amgen Inc's Dividend Sustainability and Growth
Amgen Inc(AMGN, Financial) recently announced a dividend of $2.13 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-16. 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 Amgen Inc's dividend performance and assess its sustainability.
Introducing Amgen Inc
Amgen is a leader in biotechnology-based human therapeutics. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006 and markets bone-strengthening drug Prolia/Xgeva (approved 2010) and Evenity (2019). The acquisition of Onyx bolstered the firm's therapeutic oncology portfolio with Kyprolis. Recent launches include Repatha (cholesterol-lowering), Aimovig (migraine), Lumakras (lung cancer), and Tezspire (asthma). The 2023 Horizon acquisition brings several rare disease drugs, including thyroid eye disease drug Tepezza. Amgen also has a growing biosimilar portfolio.
Amgen Inc's Dividend Track Record
Amgen Inc has maintained a consistent dividend payment record since 2011, distributing dividends on a quarterly basis. It has increased its dividend each year since 2011, earning the title of a dividend achiever. This accolade is reserved for companies that have consistently raised their dividends for at least the past 12 years. Below is a chart showing annual Dividends Per Share to track historical trends.
Analyzing Dividend Yield and Growth
As of today, Amgen Inc currently boasts a 12-month trailing dividend yield of 3.08% and a 12-month forward dividend yield of 3.15%, indicating an expected increase in dividend payments over the next year. Over the past three years, Amgen Inc's annual dividend growth rate was 10.20%. This rate increased to 10.80% per year when looking at a five-year span. Impressively, the annual dividends per share growth rate over the past decade stands at 17.90%. Based on the dividend yield and five-year growth rate, the 5-year yield on cost for Amgen Inc stock is approximately 5.14%.
Evaluating Dividend Sustainability
To assess the sustainability of the dividend, one must consider the company's payout ratio. Amgen Inc's dividend payout ratio is currently 0.59 as of 2023-09-30. A lower ratio suggests that the company retains a significant portion of its earnings, which is beneficial for funding future growth and buffering against downturns. Furthermore, Amgen Inc's profitability rank is a strong 9 out of 10, indicating good profitability prospects. The company has also reported positive net income each year for the past decade, bolstering its financial stability.
Prospective Growth Metrics
Amgen Inc's growth rank of 9 out of 10 suggests a favorable growth trajectory compared to competitors. The company's revenue per share and 3-year revenue growth rate, at an average of 8.20% per year, outperform approximately 57.1% of global competitors. Amgen Inc's 3-year EPS growth rate, although at an average decrease of -2.00% per year, still outperforms about 31.62% of global competitors. Additionally, the company's 5-year EBITDA growth rate of 23.80% outperforms approximately 76.67% of global competitors, demonstrating robust growth potential.
Conclusion: A Robust Dividend Profile
Amgen Inc's dividend payments, consistent growth, reasonable payout ratio, and strong profitability and growth metrics paint a picture of a reliable income stock. With a history of dividend increases and a solid financial foundation, Amgen Inc stands out as an attractive option for value investors seeking stable dividend income. As the company continues to innovate and expand its therapeutic portfolio, the future prospects for both the company and its dividend payments appear promising. For those interested in exploring further, GuruFocus Premium offers tools such as the High Dividend Yield Screener to identify high-dividend yield stocks.
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.
