CVS Health Corporation’s Rising Dividend Streak Reaches 15 Consecutive Years (CVS)
By: Ned Piplovic,
The CVS Health Corporation (NYSE:CVS) has boosted its annual dividend for 15 consecutive years and currently offers its shareholders a 2.7% dividend yield.
While the company’s dividend continues its strong rising trend, the share price has declined slightly over the past couple of years. However, a recent uptrend and the positive guidance for 2018, which the company announced on January 4, 2018, might be the spark that this stock needs to extend the uptrend that it has been experiencing over the past 60 days.
The company will pay its next dividend distribution on February 23, 2018, to all its shareholders of record before the company’s next ex-dividend date, which is set for February 23, 2018, exactly one month before the pay date.
CVS Health Corporation (NYSE:CVS)
Founded in 1892 and headquartered in Woonsocket, Rhode Island, the CVS Health Corporation provides integrated pharmacy health care services. The company operates through Pharmacy Services and Retail/LTC business segments. The Pharmacy Services segment offers pharmacy benefit management solutions, formulary management, Medicare Part D services, mail order, prescription management systems and other medical pharmacy management services under the Caremark, Accordant, SilverScript, NovoLogix, Coram, Navarro Health Services and several CVS brand names. The company currently operates approximately 10,000 stores in 49 U.S. states, the District of Columbia, Puerto Rico and Brazil. Additionally, the company operates online retail pharmacy websites, 38 on-site pharmacy stores, long-term care pharmacy operations and retail health care clinics. The company changed its name from the CVS Caremark Corporation to CVS Health Corporation in September 2014.
The CVS Health Corporation’s current $0.50 quarterly dividend payout converts to a $2.00 annualized dividend distribution and yields 2.7%, which is 50.8% higher than the company’s own 1.7% average yield over the past five years. The company has been boosting its annual dividend payouts for the past 15 years. Over that period, the annual dividend payout amount rose at an average growth rate of 21% per year. Because of that extraordinary growth rate, the total annual payout soared more than 17-fold since 2003.
In addition to exceeding its own historical yields, the company’s current yield outperforms the average yields of its current peers and competitors as well. The CVS Health Corporation’s current 2.7% yield is almost 39% higher than the 1.85% average yield of the entire services sector and the company’s current yield is more than 160% above the 0.98% average yield of all the companies in the drug store market segment.
The company’s share price peaked very early into the current trailing 12-month period. Between January 5, 2017 and January 17, 2017, the share price rose more than three percent to reach its 52-week high of $83.92. After that early peak, the share price settled and traded mostly sideways between $77.50 and $82.50 for the following eight months.
However, the share price fell 20% in less than 60 days between September 19, 2017, and November 6, 2017, when the share price reached its 52-week low of $66.80. Since the early November low, the share price has recovered almost 70% of those losses and closed on January 5, 2018, at $78.45, which is just 6.5% below the 52-week high from January 2017, 3.6% lower than it was one year ago, but 17.4% higher than the 52-week low from early November 2017 and 52% above the share price from five years earlier.
The rising dividends were not enough to overcome the effect of the falling price over the short term and the CVS Health Corporation handed its shareholders a 2.7% total loss over the past 12 months and a 15% total loss over the past three years. However, a longer-term outlook shows a more positive performance, as the company provided a total return of more than 65% over the past five years.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.