July 12, 2025 a 03:31 pm
AMGN: Dividend Analysis - Amgen Inc.
Amgen Inc., a leading player in the biopharmaceutical industry, offers an impressive dividend yield of 4.22%. With a consistent dividend history of 15 years and moderate growth over recent periods, the company shows a promising profile for dividend investors. However, one must carefully consider the payout ratios and cash flow performance to gauge potential risks and sustainability of the dividends.
📊 Overview
| Metric | Value |
|---|---|
| Sector | Biopharmaceutical |
| Dividend Yield | 4.22% |
| Current Dividend per Share | 8.93 USD |
| Dividend History | 15 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Amgen has maintained a commendable dividend history, reflecting a reliable income stream for its investors. The company has not experienced any recent suspension, which illustrates stability. This historical consistency is vital for investors seeking predictable income and confidence in long-term dividend sustainability.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 4.76 |
| 2024 | 9.00 |
| 2023 | 8.52 |
| 2022 | 7.76 |
| 2021 | 7.04 |
📈 Dividend Growth
The dividend growth over the past three and five years aligns with the company’s performance improvements and revenue growth. Investors view consistent dividend increases positively as it signifies management’s confidence in ongoing cash flow generation.
| Time | Growth |
|---|---|
| 3 years | 8.53% |
| 5 years | 9.18% |
The average dividend growth is 9.18% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
Payout ratios, both EPS-based and FCF-based, provide insight into the dividend sustainability. The EPS-based payout at 80.99% indicates high earnings distribution, suggesting potential risks during earnings downturns, while the FCF-based payout at 44% demonstrates relatively conservative cash flow distribution.
| Key figure | Ratio |
|---|---|
| EPS-based | 80.99% |
| Free cash flow-based | 44.00% |
The EPS payout ratio of 80.99% is on the higher side, suggesting that most of the earnings are being distributed as dividends, which may limit reinvestment. On the other hand, the FCF payout ratio of 44% is more sustainable and indicates a healthy cushion against potential earnings volatility.
✅ Cashflow & Capital Efficiency
Key indicators like Free Cash Flow Yield and Earnings Yield highlight Amgen's ability to generate cash compared to its earnings and investments. The CAPEX to Operating Cash Flow shows investment efficiency, ensuring continued growth without over-expansion. A stable Free Cash Flow / Operating Cash Flow ratio suggests efficient cash management.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 7.37% | 4.78% | 6.22% |
| Earnings Yield | 2.90% | 4.36% | 4.64% |
| CAPEX to Operating Cash Flow | 9.54% | 13.13% | 9.63% |
| Stock-based Compensation to Revenue | 1.59% | 1.53% | 1.52% |
| Free Cash Flow / Operating Cash Flow | 90.46% | 86.87% | 90.37% |
Amgen demonstrates strong cash flow generation capabilities with relatively stable metrics over the years. The company’s ability to convert a significant portion of its operating income into free cash underscores its operational efficiency, crucial for supporting its dividend policy.
⚠️ Balance Sheet & Leverage Analysis
Amgen's balance sheet reveals significant leverage, reflected in high debt-to-equity and debt-to-assets ratios. While these ratios show reliance on debt financing, the interest coverage ratio indicates that current earnings are adequate to meet interest payment obligations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 10.23 | 10.37 | 10.64 |
| Debt-to-Assets | 0.65 | 0.67 | 0.60 |
| Debt-to-Capital | 0.91 | 0.91 | 0.91 |
| Net Debt to EBITDA | 3.60 | 3.65 | 2.59 |
| Current Ratio | 0 | 0 | 0 |
| Quick Ratio | 0.95 | 1.13 | 1.10 |
| Financial Leverage | 15.63 | 15.59 | 17.79 |
Despite high leverage, Amgen's consistent earnings and cash flow capacities indicate manageable financial obligations. This balance sustains its dividend credibility while posing certain risks if market conditions fluctuate adversely.
✅ Fundamental Strength & Profitability
Assessing key profitability metrics shows Amgen’s robust ability to generate returns on its equity and assets. The margins reflect operational efficiency and indicate the potential for continued business profitability, essential for ongoing dividend disbursement.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 69.59% | 107.78% | 178.97% |
| Return on Assets | 4.45% | 6.91% | 10.06% |
| Net Profit Margin | 12.24% | 23.83% | 24.89% |
| Gross Margin | 61.53% | 70.15% | 75.66% |
| EBIT Margin | 23.23% | 38.06% | 33.55% |
| EBITDA Margin | 39.96% | 52.15% | 45.94% |
| R&D to Revenue | 17.84% | 16.97% | 16.84% |
Amgen's strong return metrics and margins demonstrate its operational efficiency and capacity to deliver consistent profits, enabling continued dividend growth and stability.
🌟 Price Development
✅ Dividend Scoring System
| Category | Score | Representation |
|---|---|---|
| Dividend Yield | 4 / 5 | |
| Dividend Stability | 5 / 5 | |
| Dividend Growth | 3 / 5 | |
| Payout Ratio | 3 / 5 | |
| Financial Stability | 2 / 5 | |
| Dividend Continuity | 5 / 5 | |
| Cashflow Coverage | 4 / 5 | |
| Balance Sheet Quality | 3 / 5 |
Total Score: 29 / 40
🏅 Rating
Amgen Inc. demonstrates a strong dividend profile, marked by steady historical payments and sustainable growth potential. Despite heavy reliance on debt, solid cash flow management and profitability metrics bolster investor confidence. The company is rated as a solid dividend player with continued prospects for investors seeking stable income.