Noticia del Sector Sanitario

the announcement that the company initiated a dividend payment came as a big surprise for many. The first quarterly dividend ($0.43) was paid in the second quarter of 2015, and at an annualized rate of $1.72, Gilead's current yield stands at 1.9%.

Gilead will publish 2015 results in on February 2, and the last dividend was announced on October 27. In other words, it is time to spend some thoughts on Gilead's dividend outlook for 2016. There are basically two options: Either the dividend will already be raised within the next few weeks, prior or together with the release of the FY15 results or later at the end of April after four quarters of constant payments.

In any case, I count on a substantial dividend increase. 2015 will be another record year with new record earnings and record free cash flow. The payout ratio of only 14% based on the expected adjusted FY15 EPS is ridiculously low, leaving plenty of room for future raises. Therefore, it does not take an optimist to forecast a significantly higher dividend.

Fundamental Situation

Despite all record figures and the continuous earnings beats, Gilead shares lost more than 15% since the superb 2014 figures were released and the dividend was announced. The reasons are well known and are of course related to the question of how much further growth Gilead's dominating HCV drugs Sovaldi and Harvoni can generate. To summarize the company's situation in one sentence: For the next few years, these mega blockbusters will continue to determine Gilead's fate, and neither the pipeline nor smaller acquisitions will be able to deliver an earnings contribution which comes close to Sovaldi's or Harvoni's.