In This Article:
Assessing Amgen Inc's Dividend Sustainability and Growth
Amgen Inc(NASDAQ:AMGN) 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
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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.