April 23, 2025 a 07:46 am
GILD: Dividend Analysis - Gilead Sciences, Inc.
Gilead Sciences, Inc. is an established entity in the pharmaceutical sector, showing a strong track record of consistent and sustainable dividend payouts. Given its position, Gilead remains a viable choice for dividend-focused investors. However, the high EPS payout ratio suggests underlying profitability issues that warrant attention.
Overview 📊
Analyzing Gilead’s dividend metrics reveals a solid foundation with a healthy yield and history. However, attention is required on sustainability given the EPS payout levels.
| Metric | Data |
|---|---|
| Sector | Pharmaceuticals |
| Dividend Yield | 2.78% |
| Current Dividend per Share | 3.14 USD |
| Dividend History | 11 years |
| Last Cut or Suspension | None |
Dividend History 🗣️
Gilead’s dividend history confirms its reliability in maintaining dividends over the years, enhancing investor confidence.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.79 |
| 2024 | 3.08 |
| 2023 | 3.00 |
| 2022 | 2.92 |
| 2021 | 2.84 |
Dividend Growth 📈
Though modest, Gilead’s dividend growth over the past few years is indicative of stability, important for long-term-oriented investors.
| Time | Growth |
|---|---|
| 3 years | 2.74% |
| 5 years | 4.10% |
The average dividend growth is 4.10% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio ⚠️
Evaluating the payout ratio highlights potential risks. The EPS-based ratio exceeds 800%, considerably higher than sustainable levels, indicating potential future dividend cuts.
| Key Figure | Ratio |
|---|---|
| EPS-based | 816.90% |
| Free Cash Flow-based | 37.47% |
The EPS payout ratio at 816.90% is exceedingly high, suggesting profits aren’t supporting dividend payments adequately, while a more moderate FCF payout of 37.47% shows stronger cash coverage.
Cashflow & Capital Efficiency 💡
An in-depth look into Gilead’s cashflow metrics unveils its operational health and capital efficiency. The cash flow ratios are crucial in assessing dividends' sustainability.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 8.95% | 7.34% | 7.74% |
| Earnings Yield | 0.42% | 5.60% | 4.26% |
| CAPEX to Operating Cash Flow | 3.47% | 7.31% | 8.02% |
| Stock-based Compensation to Revenue | 2.13% | 2.82% | 2.33% |
| Free Cash Flow / Operating Cash Flow Ratio | 95.17% | 92.69% | 91.98% |
Gilead’s free cash flow yield remains consistent, suggesting manageable operational efficiencies but with an eye on maintaining these metrics for future stability.
Balance Sheet & Leverage Analysis 💼
Analyzing balance sheet leverage provides insights into Gilead's financial health, focusing on its debt load management and liquidity.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 16.09% | 109.43% | 118.96% |
| Debt-to-Assets | 5.27% | 40.22% | 39.94% |
| Debt-to-Capital | 13.86% | 52.25% | 54.33% |
| Net Debt to EBITDA | 3.77 | 1.80 | 2.23 |
| Current Ratio | 1.50 | 1.42 | 1.36 |
| Quick Ratio | 1.45 | 1.27 | 1.10 |
| Financial Leverage | 3.05 | 2.72 | 2.98 |
Leverage metrics signal both potential risks and resilience if supported by cash flows and earnings, with an eye towards more aggressive debt repayment to ensure stability.
Fundamental Strength & Profitability 🏦
Key profitability ratios demonstrate Gilead's operational effectiveness, providing insights critical to long-term performance and shareholder returns.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 2.48% | 24.81% | 21.65% |
| Return on Assets | 0.81% | 9.12% | 7.27% |
| Margin - Net | 1.67% | 20.89% | 16.83% |
| Margin - EBIT | 5.80% | 28.77% | 24.74% |
| Margin - EBITDA | 5.78% | 38.71% | 32.45% |
| Margin - Gross | 78.26% | 76.04% | 79.26% |
| Research & Development to Revenue | 20.36% | 25.53% | 18.24% |
High margins and returns on equity/assets indicate robust profitability and less susceptibility to downturns when efficiently managed.
Price Development 📉
Dividend Scoring System 🎯
| Criteria | Score | Indicator |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 27 out of 40
Rating ✅
In conclusion, while Gilead Sciences shows consistent dividend history and growth potential, its risky payout ratios suggest a cautious approach for dividend-oriented portfolios. Monitoring financial performances and cash flow health remains essential for sustainable investments.