This is part two of the Dividend/EPS series - with those stats posted at the end of the message. And the purpose of this is to prep my audience for the atypical stats in Health Care REITs that are about to come.
Health Care 03-14-14Yield in the spreadsheet below is based on the Q1-14 dividend. Spreadsheet header abbreviations: Div = dividend; EPS = earnings per share; LTM = last twelve months; YTD = year to date. The dividend to EPS ratio is a measure of dividend safety. At this point in time, companies that pay dividends once per year have had their payouts divided by four and encoded in this data is if they paid a quarterly dividend. ABBV has announced an increase in its Q2-14 div to $0.42/share payable 5-15-14.RHHBY had a two for one stock split on 2-27-14 -- and that change in not reflected in the data below.
| 12-31-13 | 03-14 | Div | Current | Div/ | Div/ | Percent Change | ||||||||||
| Company | Price | Price | /Quarter | Yield | EPS14 | EPS15 | Price | Pr+Div | EPS14 | Target | Div 1yr | Div 3yr | ||||
| AbbVie | (ABBV) | 52.81 | 51.21 | 0.400 | 3.12 | 51 % | 44 % | -3.03 | -2.27 | -1.89 | 9.97 | 0.00 | na | |||
| Amerisource | (ABC) | 70.31 | 67.57 | 0.235 | 1.39 | 25 % | 22 % | -3.90 | -3.56 | 0.00 | 16.52 | 11.90 | 45.00 | |||
| Abbott | (ABT) | 38.33 | 38.97 | 0.220 | 2.26 | 40 % | 36 % | 1.67 | 2.03 | 0.00 | 13.72 | 57.14 | 1.42 | |||
| Allergan | (AGN) | 111.08 | 128.34 | 0.050 | 0.16 | 4 % | 3 % | 15.54 | 15.58 | 0.18 | 15.05 | 0.00 | 0.00 | |||
| Amgen | (AMGN) | 114.08 | 122.54 | 0.610 | 1.99 | 30 % | 28 % | 7.42 | 7.83 | -0.24 | 9.33 | 29.79 | na | |||
| AstraZenica | (AZN) | 59.37 | 65.30 | 0.700 | 4.29 | 66 % | 66 % | 9.99 | 9.99 | -8.58 | 6.38 | 0.00 | 1.23 | |||
| Baxter | (BAX) | 69.55 | 66.49 | 0.490 | 2.95 | 38 % | 36 % | -4.40 | -3.70 | 0.00 | 13.19 | 8.89 | 19.35 | |||
| Bayer | (OTCPK:BAYRY) | 142.00 | 132.15 | 0.617 | 1.87 | 30 % | 26 % | -6.94 | -6.94 | -6.13 | 19.22 | 0.00 | 6.72 | |||
| CR Bard | (BCR) | 133.94 | 144.92 | 0.210 | 0.58 | 10 % | 9 % | 8.20 | 8.35 | 6.78 | 9.01 | 5.00 | 5.56 | |||
| Becton | (BDX) | 110.49 | 115.35 | 0.545 | 1.89 | 35 % | 32 % | 4.40 | 4.40 | 0.00 | 8.33 | 10.10 | 10.98 | |||
| Bristol-Myers | (BMY) | 53.15 | 54.00 | 0.360 | 2.67 | 81 % | 86 % | 1.60 | 2.26 | 0.56 | 10.19 | 2.86 | 3.03 | |||
| Covidien | (COV) | 68.10 | 70.26 | 0.320 | 1.82 | 32 % | 28 % | 3.17 | 3.64 | 14.90 | 13.47 | 39.13 | 26.93 | |||
| Glaxo | (GSK) | 53.39 | 54.23 | 0.615 | 4.54 | 66 % | 60 % | 1.57 | 2.73 | -3.12 | 18.61 | -10.74 | 0.00 | |||
| JandJ | (JNJ) | 91.59 | 92.81 | 0.660 | 2.84 | 45 % | 42 % | 1.33 | 2.05 | -0.17 | 14.05 | 8.20 | 7.41 | |||
| Lily | (LLY) | 51.00 | 58.87 | 0.490 | 3.33 | 70 % | 62 % | 15.43 | 16.39 | 0.00 | 6.52 | 0.00 | 0.00 | |||
| McKesson | (MCK) | 161.40 | 180.81 | 0.240 | 0.53 | 12 % | 9 % | 12.03 | 12.03 | -2.50 | 16.64 | 20.00 | 11.11 | |||
| Medtronic | (MDT) | 57.39 | 58.86 | 0.280 | 1.90 | 29 % | 27 % | 2.56 | 3.05 | 0.00 | 13.38 | 7.69 | 8.15 | |||
| Merck | (MRK) | 50.05 | 55.70 | 0.440 | 3.16 | 51 % | 48 % | 11.29 | 12.17 | -1.15 | 6.55 | 2.33 | 5.26 | |||
| Noradisk | (NVO) | 36.95 | 45.55 | 0.159 | 1.40 | 33 % | 30 % | 23.27 | 23.27 | 39.42 | 14.56 | 0.00 | 25.05 | |||
| Novartis | (NVS) | 80.38 | 81.59 | 0.632 | 3.10 | 47 % | 45 % | 1.51 | 1.51 | -2.01 | 5.62 | 0.00 | 2.51 | |||
| Pfizer | (PFE) | 30.63 | 31.23 | 0.260 | 3.33 | 46 % | 44 % | 1.96 | 2.74 | 0.00 | 11.45 | 8.33 | 10.00 | |||
| Perrigo | (PRGO) | 153.46 | 165.49 | 0.105 | 0.25 | 6 % | 5 % | 7.84 | 7.90 | 0.15 | 12.29 | 16.67 | 16.67 | |||
| Roche | (OTCQX:RHHBY) | 70.20 | 72.54 | 0.505 | 2.79 | 48 % | 45 % | 3.33 | 3.33 | -2.11 | 16.59 | 8.71 | 5.90 | |||
| St. Jude | (STJ) | 61.95 | 65.35 | 0.270 | 1.65 | 27 % | 25 % | 5.49 | 5.49 | 0.00 | 14.61 | 8.00 | 9.52 | |||
| Stryker | (SYK) | 75.14 | 80.27 | 0.305 | 1.52 | 25 % | 23 % | 6.83 | 7.23 | 0.00 | 39.96 | 15.09 | 23.15 | |||
| Teva | (TEVA) | 40.08 | 48.88 | 0.326 | 2.67 | 29 % | 29 % | 21.96 | 22.77 | -1.31 | 8.85 | 5.16 | 17.21 | |||
| Thermo | (TMO) | 111.35 | 122.25 | 0.150 | 0.49 | 9 % | 8 % | 9.79 | 9.92 | 1.04 | 11.92 | 0.00 | na | |||
| Zimmer | (ZMH) | 93.19 | 94.15 | 0.200 | 0.85 | 13 % | 12 % | 1.03 | 1.24 | 0.00 | 9.57 | 0.00 | na | |||
| Zoetis | (ZTS) | 32.69 | 29.42 | 0.072 | 0.99 | 19 % | 17 % | -10.00 | -9.80 | -5.56 | 18.25 | 11.54 | na | |||
| Average | 2.08 | 35 % | 33 % | 5.20 | 5.59 | 0.97 | 13.23 | 9.17 | 10.92 | |||||||
| With the 10 Treasury at 2.69% and the sector average yield [on Q1 Divs] at 2.08% - the spread is -61 basis points. | ||||||||||||||||
| The cap weighted ETF XLV is up 5.41% year to date - with dividends its total return is 5.41%. | ||||||||||||||||
| * The change in the dividend is for the last twelve months and not year to date. | ||||||||||||||||
Dates used to credit dividends:
| ABBV : 2-13-14 | ABC : 02-13-14 | ABT : 02-14-14 | AGN: 12-10-13 | AMGN: 03-06-14 | AZN: 09-15-13 | BAX : 01-02-14 |
| BAYRY: yearly | BCR: 01-30-14 | BDX;: 03-30-14 | BMY;: 02-02-14 | COV: 02-19-14 | GSK: 01-08-14 | JNJ: 03-10-14 |
| LLY : 03-09-14 | MCK: 03-31-14 | MDT: 04-25-14 | MRK: 01-07-14 | NVO: yearly | NVS: 04-04-14 | PFE: 03-03-14 |
| PRGO: 03-17-14 | RHHBY: yearly | STJ: 03-31-14 | SYK: 01-30-14 | TEVA: 12-02-13 | TMO : 01-14-14 | ZMH: 01-30-14 |
| ZTS : 03-03-14 |
Earnings Growth & P/E Ratios 03-14
Fiscal and calendar years are not in sync.
| Earnings / Share | Earn. Growth | P/E Ratios | 14 EPS Range | |||||||||||||
| Co. | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 12-13 | 13-14 | 14-15 | 2013 | 2014 | 2015 | High | Low | Range |
| ABBV | 0 | 0 | 0 | 0 | 314 | 311 | 362 | na | -0.96% | 16.40% | 16.31 | 16.47 | 14.15 | 330 | 307 | 7.40% |
| ABC | 167 | 219 | 251 | 276 | 314 | 369 | 430 | 13.77% | 17.52% | 16.53% | 21.52 | 18.31 | 15.71 | 375 | 363 | 3.25% |
| ABT | 0 | 0 | 0 | 174 | 201 | 220 | 247 | 15.52% | 9.45% | 12.27% | 19.39 | 17.71 | 15.78 | 231 | 212 | 8.64% |
| AGN | 0 | 0 | 0 | 414 | 477 | 547 | 622 | 15.22% | 14.68% | 13.71% | 26.91 | 23.46 | 20.63 | 575 | 524 | 9.32% |
| AMGN | 491 | 521 | 533 | 651 | 760 | 815 | 871 | 16.74% | 7.24% | 6.87% | 16.12 | 15.04 | 14.07 | 864 | 776 | 10.80% |
| AZN | 0 | 0 | 0 | 641 | 506 | 426 | 424 | -21.06% | -15.81% | -0.47% | 12.91 | 15.33 | 15.40 | 500 | 441 | 13.85% |
| BAX | 380 | 398 | 431 | 453 | 467 | 513 | 550 | 3.09% | 9.85% | 7.21% | 14.24 | 12.96 | 12.09 | 518 | 500 | 3.51% |
| BAYRY | 0 | 0 | 0 | 688 | 745 | 827 | 938 | 8.28% | 11.01% | 13.42% | 17.74 | 15.98 | 14.09 | 792 | 792 | 0.00% |
| BCR | 509 | 560 | 640 | 657 | 578 | 819 | 917 | -12.02% | 41.70% | 11.97% | 25.07 | 17.69 | 15.80 | 828 | 720 | 13.19% |
| BDX | 495 | 490 | 533 | 537 | 581 | 623 | 682 | 8.19% | 7.23% | 9.47% | 19.85 | 18.52 | 16.91 | 652 | 618 | 5.46% |
| BMY | 0 | 216 | 228 | 199 | 182 | 178 | 168 | -8.54% | -2.20% | -5.62% | 29.67 | 30.34 | 32.14 | 186 | 170 | 8.99% |
| COV | 284 | 338 | 397 | 426 | 372 | 401 | 451 | -12.68% | 7.80% | 12.47% | 18.89 | 17.52 | 15.58 | 410 | 395 | 3.74% |
| GSK | 0 | 0 | 0 | 353 | 373 | 373 | 407 | 5.67% | 0.00% | 9.12% | 14.54 | 14.54 | 13.32 | 401 | 361 | 10.72% |
| JNJ | 463 | 476 | 500 | 510 | 552 | 583 | 628 | 8.24% | 5.62% | 7.72% | 16.81 | 15.92 | 14.78 | 602 | 579 | 3.95% |
| LLY | 442 | 474 | 441 | 339 | 415 | 281 | 318 | 22.42% | -32.29% | 13.17% | 14.19 | 20.95 | 18.51 | 288 | 275 | 4.63% |
| MCK | 407 | 462 | 486 | 638 | 633 | 818 | 1069 | -0.78% | 29.23% | 30.68% | 28.56 | 22.10 | 16.91 | 885 | 811 | 9.05% |
| Earnings / Share | Earn. Growth | P/E Ratios | 14 EPS Range | |||||||||||||
| Co. | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 12-13 | 13-14 | 14-15 | 2013 | 2014 | 2015 | High | Low | Range |
| MDT | 292 | 322 | 337 | 346 | 375 | 382 | 409 | 8.38% | 1.87% | 7.07% | 15.70 | 15.41 | 14.39 | 385 | 380 | 1.31% |
| MRK | 325 | 342 | 377 | 382 | 349 | 344 | 370 | -8.64% | -1.43% | 7.56% | 15.96 | 16.19 | 15.05 | 375 | 307 | 19.77% |
| NVO | 0 | 0 | 0 | 0 | 167 | 191 | 215 | na | 14.37% | 12.57% | 27.28 | 23.85 | 21.19 | 189 | 187 | 1.05% |
| NVS | 0 | 0 | 0 | 0 | 501 | 537 | 557 | na | 7.19% | 3.72% | 16.29 | 15.19 | 14.65 | 570 | 521 | 9.12% |
| PFE | 202 | 222 | 231 | 219 | 222 | 227 | 236 | 1.37% | 2.25% | 3.96% | 14.07 | 13.76 | 13.23 | 232 | 220 | 5.29% |
| PRGO | 0 | 293 | 401 | 499 | 561 | 663 | 803 | 12.42% | 18.18% | 21.12% | 29.50 | 24.96 | 20.61 | 673 | 648 | 3.77% |
| RHHBY | 0 | 274 | 279 | 325 | 384 | 418 | 454 | 18.15% | 8.85% | 8.61% | 18.89 | 17.35 | 15.98 | 432 | 415 | 4.07% |
| STJ | 234 | 301 | 328 | 239 | 376 | 398 | 430 | 57.32% | 5.85% | 8.04% | 17.38 | 16.42 | 15.20 | 402 | 393 | 2.26% |
| SYK | 295 | 333 | 372 | 407 | 423 | 483 | 527 | 3.93% | 14.18% | 9.11% | 18.98 | 16.62 | 15.23 | 489 | 448 | 8.49% |
| TEVA | 336 | 454 | 497 | 535 | 501 | 453 | 450 | -6.36% | -9.58% | -0.66% | 9.76 | 10.79 | 10.86 | 576 | 410 | 36.64% |
| TMO | 0 | 0 | 416 | 494 | 542 | 681 | 784 | 9.72% | 25.65% | 15.12% | 22.56 | 17.95 | 15.59 | 693 | 564 | 18.94% |
| ZMH | 394 | 433 | 480 | 530 | 575 | 621 | 679 | 8.49% | 8.00% | 9.34% | 16.37 | 15.16 | 13.87 | 630 | 583 | 7.57% |
| ZTS | 0 | 0 | 0 | 108 | 142 | 153 | 175 | 31.48% | 7.75% | 14.38% | 20.72 | 19.23 | 16.81 | 170 | 154 | 10.46% |
| BDC Average | 7.63 | 7.35 | 10.17 | 19.18 | 17.78 | 16.16 | 8.97 | |||||||||
The Predictive Power of the Dividend/EPS Ratio on Valuations
The following stocks had Q1-14 Dividend/EPS ratios of less than 25%: AGN, BCR, MCK, PRGO, TMO, ZMH and ZTS. Their YTD mean price gain = 6.35% and 5 of the 7 beat the sector mean yearly price gain [5.2%]. Their mean yield = 0.53% and they had an average price/earnings ratio = 20.08.
The following had Q1-14 Dividend/EPS ratios of more than 25% - but less than 40%: ABC, ABT, AMGN, BAX, BAYRY, BDX, COV, MDT, NVO, STJ, SYK and TEVA. Their YTD mean price gain = 5.13% and 5 of the 12 beat the sector mean yearly price gain. Their mean yield = 1.81% - and they sold at an average price/earnings ratio = 16.59.
The following had Q1-14 Dividend/EPS ratios of more than 40% - but less than 50%: JNJ, NVS, PFE and RHHBY. Their YTD mean price gain = 2.03% and 0 of the 4 beat the sector mean yearly price gain. Their mean yield = 2.95% - and they sold at an average price/earnings ratio = 15.56.
The following companies had Q1-14 Dividend/EPS ratios of more than 50%: ABBV, AZN, BMY, GSK, LLY and MRK. Their YTD mean price gain = 6.14% and 3 of the 6 beat the sector mean yearly price gain. Their mean yield = 3.51% - and they sold at an average price/earnings ratio of 18.97.
In the stats above, you can see the pattern of the higher growth stocks - and those which reinvest a large portion of their earnings back into the company, having the lower yields and the higher P/E ratios. That pattern is broken in the last grouping. Why?
The first reason - BMY skews the results with a very high 30.34 P/e ratio. Second - There are more household names in this grouping. Everybody knows BMY, GSK, LLY and MRK. That probably has an influence on their valuations. Third - that valuations for this sector appear to be really messed up. I say that because the "yield + CAGRs" are really out of kilter for the well known names of Big Pharma. But even with these problems - one should still be able to see the pattern. Higher growth stocks strongly tend to have lower dividend to earning ratios; lower yields; and high price to earning ratios.