Zimmer Biomet Holdings, Inc.

🇺🇸New York Stock Exchange
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Zimmer Biomet Holdings, Inc. stock analysis ZBH overview
Bullish +65

Should You Buy Zimmer Biomet Holdings, Inc. (NYSE:ZBH) For Its Upcoming Dividend? - simplywall.st

📅 Investors must buy shares before March 31st to qualify for the April 30th dividend payment.

💰 The upcoming dividend is US$0.24 per share, resulting in a trailing yield of 1.1% on the current price of US$89.15.

📈 Earnings per share have grown rapidly at an average rate of 18% annually over the past five years.

💵 The dividend payout ratio is conservative at 27% of earnings and 17% of free cash flow, indicating sustainability.

🔄 The company retains over half of its earnings for reinvestment into business growth initiatives.

⚠️ The article notes the presence of two specific warning signs regarding the stock that investors should be aware of.

Bullish Signals
  • The dividend is fully covered by both net income and free cash flow, reducing the risk of a cut.
  • Earnings per share have grown at an impressive average rate of 18% per annum over the last five years.
  • The company maintains a conservative payout ratio of only 27% of earnings, leaving ample room for future increases.
  • Zimmer Biomet retains more than half of its earnings within the business, signaling a strong focus on reinvestment and growth.
  • The stock possesses an adequate balance sheet while simultaneously paying a consistent dividend.
Risk Factors
  • The article explicitly states that Zimmer Biomet Holdings currently faces two warning signs that investors should be aware of.
  • The trailing dividend yield is relatively low at 1.1%, which may not appeal to high-yield seekers compared to other sectors.
Full Analysis
Zimmer Biomet Holdings (NYSE:ZBH) is approaching its ex-dividend date, with shareholders needing to purchase shares before March 31st to receive the upcoming dividend payment scheduled for April 30th. The company will distribute US$0.24 per share, bringing the total annualized payout to US$0.96 based on the last 12 months of payments. The stock currently trades at US$89.15, yielding a trailing dividend rate of 1.1%. Analysis indicates the dividend is sustainable as it covers both earnings and free cash flow, with the company paying out only 27% of its earnings and 17% of its free cash flow to shareholders. Zimmer Biomet has demonstrated strong financial health with earnings per share growing at an average rate of 18% per annum over the last five years. The company retains more than half of its earnings for reinvestment, suggesting a focus on growth while maintaining a conservative payout ratio and adequate balance sheet.