Assessing the Sustainability of Organon & Co's Upcoming Dividend
Organon & Co (OGN, Financial) recently announced a dividend of $0.28 per share, payable on 2024-03-14, with the ex-dividend date set for 2024-02-23. 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 Organon & Co's dividend performance and assess its sustainability.
What Does Organon & Co Do?
Organon & Co is a science-based global pharmaceutical company that develops and delivers health solutions through a portfolio of prescription therapies within women's health, biosimilars, and established brands. The Company's operations include the following product portfolio: Women's health, Biosimilars, and Established medicines. Geographically, it derives a majority of its revenue from Europe and Canada.
A Glimpse at Organon & Co's Dividend History
Organon & Co has maintained a consistent dividend payment record since 2021, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Organon & Co's Dividend Yield and Growth
As of today, Organon & Co currently has a 12-month trailing dividend yield of 6.04% and a 12-month forward dividend yield of 6.04%. This suggests an expectation of same dividend payments over the next 12 months. Based on Organon & Co's dividend yield and five-year growth rate, the 5-year yield on cost of Organon & Co stock as of today is approximately 6.04%.
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, Organon & Co's dividend payout ratio is 0.35.
Organon & Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Organon & Co's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 5 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Organon & Co's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Organon & Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Organon & Co's revenue has increased by approximately -7.70% per year on average, a rate that underperforms approximately 81.94% 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, Organon & Co's earnings increased by approximately -33.20% per year on average, a rate that underperforms approximately 88.38% of global competitors.
Next Steps
In conclusion, Organon & Co's upcoming dividend payment reflects a history of consistent shareholder returns. However, investors should closely monitor the dividend growth rate, payout ratio, profitability, and growth metrics to gauge the long-term sustainability of these payments. While the current yield is attractive, the underlying financial health and growth trajectory of Organon & Co will be crucial in maintaining these dividends. As we consider these factors, one might ask: Will Organon & Co continue to provide a stable dividend yield in the face of its revenue and earnings challenges? For those seeking high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research.
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.
