Why AstraZeneca PLC (AZN) Is a Top European Dividend Stock
Monday, Dec 23, 2024 1:30 pm ET
3min read AstraZeneca PLC (AZN), a leading biopharmaceutical company, has been making waves in the European dividend stock scene. With a progressive dividend policy and strong financial performance, AZN is an attractive choice for income-oriented investors. Let's delve into the reasons why AstraZeneca is among the best European dividend stocks to buy now.
AstraZeneca's progressive dividend policy is a key factor contributing to its investment appeal. The company aims to maintain or grow its dividend each year, reflecting the Board's view of the earnings prospects over the investment cycle. This approach balances the interests of the business, financial creditors, and shareholders while maintaining a strong credit rating. The company's annual dividend of £2.34 per share, with a yield of 2.28%, is a testament to its commitment to returning value to shareholders.
AstraZeneca's earnings prospects and financial stability are crucial in supporting its dividend growth. In the first nine months of 2024, the company reported a 21% increase in total revenue and a 27% rise in core EPS, reflecting strong demand for its medicines across Oncology, BioPharmaceuticals, and Rare Disease. This growth, coupled with a progressive dividend policy, has enabled AstraZeneca to maintain or grow its dividend each year. With a dividend payout ratio of 45% and a debt-to-equity ratio of 0.3, the company demonstrates a strong balance sheet and financial sustainability.
AstraZeneca's dividend growth has been steady and impressive. From 2010 to 2024, the company's annual dividend per share has increased by an average of 7.5% per year, with a 5-year CAGR of 8.2%. This compares favorably to the MSCI Europe Dividend Growers Index, which has a 5-year CAGR of 6.5%. AstraZeneca's dividend yield is currently 2.28%, higher than the MSCI Europe's 3.47% yield. Additionally, AstraZeneca has a strong balance sheet, with a dividend payout ratio of 45% and a debt-to-equity ratio of 0.3. This suggests that the company has the financial stability to continue paying and growing its dividend.
In conclusion, AstraZeneca PLC (AZN) is a top European dividend stock to consider now. Its progressive dividend policy, strong financial performance, and impressive dividend growth make it an attractive choice for income-oriented investors. With a yield of 2.28% and a history of consistent dividend payments, AstraZeneca remains a solid investment option in the European pharmaceutical sector. As the company continues to grow its earnings and maintain its financial stability, investors can expect a steady and growing income stream from this dividend stock.
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