Sonic Healthcare Limited (ASX: SHL) has declared a dividend of A$0.44 per share, scheduled for payment on March 20th. This announcement comes with a dividend yield of 3.8%, reflecting the company’s ongoing commitment to providing returns to its shareholders.
In recent years, Sonic Healthcare has maintained a high payout ratio, distributing 94% of its earnings and 71% of its free cash flows as dividends. However, the company is adjusting its future payout strategies, estimating a future dividend payout ratio of 70%, which aligns with growth in the sector and allows room for reinvestment into business operations.
Looking ahead, Sonic Healthcare’s earnings per share (EPS) are projected to increase by 41.2% over the next year. This positive forecast indicates robust future performance, despite earnings per share having remained stagnant compared to five years ago.
Since 2015, the company’s dividend has increased from A$0.67 to A$1.06 per year, achieving an annual growth rate of approximately 4.7%. While the dividends have grown, there is an identified concern regarding the high ratio of earnings being paid out as dividends, which analysts consider to be on the higher side of comfort.
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