The healthcare giant is raising the dividend but only gained 3% in 2015.
2015 turned out to be a bland year for the investors of the healthcare company, CVS Health Corporation as the stock only gained 3% in share price. Although it managed to outperform the S&P 500 Index but could not keep up with its major rival Walgreens Boots Alliance, an American holding company.
This uninspiring performance of the stock becomes more surprising when the healthcare giant announced the rise in its dividend payment by as much as 21%. Currently, the dividend payout ratio performance stands at 1.74%. There are a number of growth driver left in the pharma company including its newly completed acquisition of Target. This deal was worth $1.9 billion which helped add over 1,673 novel stores to its already huge realm. Before this take over took place, there were over 7,900 stores owned by the organization. With the finalization of this contract, CVS can now officially operate all the pharmacies that it acquired which would also help in further growth.
With time it has also added MinuteClinics, which are in-store clinics, to its portfolio; currently it has over 1,000 operational MinuteClinics and the management believes that it can have more than 1,500 more in-store clinics by the year 2017. Along with these acquisitions, it is also making an effort to getting into the ‘long-term-care pharmacy business’, as it acquired Omnicare. This take over was worth $12.9 billion, carried on in 2015. Omnicare provides long term pharmaceutical assistance to long term care facilities.
According to the healthcare organization, it will be able to report increase in earnings per share growth of 11.25% for the current year however it stated that a fall in the profits of as much as $5.73 or $5.88 per share is likely to be witnessed. In the past five years, there has been an altogether increase of 240%. After the increase in dividend is applied, $1.70 dividend has to be paid by the company per share yearly.
The outstanding shares of the company are 1.11 billion shares according to which the dividend paid on these shares will be for $1.9 billion per year. In free cash flow CVS Health managed to spawn $6.1 billion in a year’s time. CVS Health Stock is being traded at a share price of $94.19 which shows a decline of 1.43% in comparison to its previous share price. During the course of the trade session, CVS stock was seen at a high point of $95.68 and at a low it was at $93.92. The market capitalization is at $105.83 billion.