AstraZeneca's Dividend Will Be Increased to £1.45

AstraZeneca PLC has announced that its dividend would be increased to £1.45 on March 28th.
 
CENTRAL, Hong Kong - March 24, 2022 - PRLog -- While a larger yield would be desirable, we also need to consider if increased dividend payments are sustainable. The corporation had been paying out 3,634% of its earnings prior to this revelation. This position is far from ideal, and if it persists, it might put a considerable burden on the balance sheet.

In the coming year, profits per share are expected to increase by a factor of ten. We anticipate that the payout ratio might reach 48% if the dividend continues on its current path, which is within our comfort zone. Even after a long history of dividend payments, the company's payouts have remained impressively consistent. The dividend has increased from $2.70 in 2012 to $2.87 in the most recent payout. Dividend payments have increased through time, although at a relatively sluggish pace. A slow and steady dividend increase may not seem thrilling but payouts have been constant for 10 years, making this a reasonably appealing proposition in our opinion.

Based on the company's dividend history, some investors will be salivating at the prospect of purchasing some of the company's shares. Unfortunately, things are not as they appear. Over the last five years, AstraZeneca's EPS has plummeted by almost 52% each year. This sharp drop might suggest that the company is going through a difficult period, limiting the company's capacity to pay a greater dividend each year in the future. However, the coming year appears to be on the upswing, with earnings expected to grow. Before getting too thrilled, we'd wait until it becomes a pattern.

In the last 12 months, the firm has additionally raised capital by issuing stock equal to 18% of outstanding shares. Trying to increase the dividend when issuing additional shares reminds us of Sisyphus, who is forever dragging a rock upward. Companies that issue new shares on a regular basis tend to be frequent underperformers when it comes to dividend.

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