Gilead Sciences (GILD) Dividend Stock Analysis

by | Dividend Stock Analysis

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Gilead Sciences Dividend

Gilead Sciences initiated a dividend in 2015 and has increased the dividend for 7 consecutive years; qualifying the company for the Dividend Challengers list.

GILD has an exceptional ability to make acquisitions of key treatments and turn them into sustainable long term profit centers that meet critical needs of patients.  This ability, together with their own R&D, has created a portfolio of assets that provide a strong moat for the company.

Current Dividend Annualized: $2.84

Gilead Sciences (GILD) Intrinsic Value – Margin of Safety Analysis            

(updated August 2021)

Normalized Diluted Earnings Per Share (TTM): $4.10
Cash Flow From Operations Per Share (TTM): $7.19
Free Cash Flow Per Share (TTM):  $9.43

Estimated Intrinsic Value: $76

Target Buy Price Based on Required Margin of Safety =  $59
(Required Margin of Safety Based On Risk Stability Grade:

A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)

Target SELL Price Based on Estimated Intrinsic Value = $84
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 20%, B = 15%, C = 10%, D = 5%, F = 0%)

 

Risk / Stability Grade:  C

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

 

Financial Risk Grade:  C

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

 

Earnings Quality Grade:  B+

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report:  6/30/21

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AAAMP Portfolios Position Disclosures:
Dividend Growth & Income – LONG
Treasure Trove Twelve – None
Global Dividend Balanced – None
Global Value – None
Global Value Aggressive – None
High Yield – None

Company Description

Sector: Healthcare
Industry: Biotechnology

Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The company has produced a promising COVID-19 treatment (Remdesivir) in a remarkably short time period.

The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer.

Gilead’s acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of combination drug Harvoni, and the Kite acquisition boosted Gilead’s exposure to cell therapy in oncology.

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Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.

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