ResMed Inc. (NYSE:RMD) is preparing to trade ex-dividend in four days, implying that purchases from November 8 will not be eligible for the next dividend payout on December 14. The forthcoming dividend is pegged at US$0.48 per share, culminating in an annual total of US$1.92 per share. This results in a trailing yield of 1.3% based on the current stock price of $150.1.
The company's dividends are primarily funded by its earnings, with a manageable payout ratio of 29% of earnings and 33% of free cash flow committed to dividends. These figures suggest a sustainable dividend plan unless there occurs a drastic decline in earnings.
Over the past five years, ResMed has witnessed a substantial earnings growth rate of 23% annually, signaling strong growth prospects and business reinvestment for expansion. Analysts' forecasts reveal a historical rate of dividend growth of 11% annually over the past decade. This combination, along with the potential for higher payout percentages, suggests significant long-term dividend multiplication.
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