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Investing At Astrazeneca.edited

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Running head: INVESTING AT ASTRAZENECA 1

Investing At AstraZeneca

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INVESTING AT ASTRAZENECA 2

Investing At AstraZeneca

Investing in a strong business and that reinvests its dividends to profits is one of the most

attractive ways of growing your wealth. Sometimes investors buy popular dividend stock due to

its yield, but later lose their money when the dividends from such a company don't yield the

anticipated results. Many investors find AstraZeneca amazing since it yields 3.3% and has paid

dividends for more than ten years. Most investors have purchased the company shares due to the

amount of income it brings (Viña et al., 2019). This paper will examine different reasons why

someone would choose to invest in AstraZeneca.

Payout Ratios

The company pays its dividends based on its earnings. If a company pays more dividends

than it earned, then the dividend might be unsustainable which a hard ideal situation. The

simplest way of checking whether the company's dividend is sustainable is by comparing its

dividend payment against its net profit after tax. Looking at our previous data analysis, it is

evident that 164% of AstraZeneca's profits were remitted as dividends for the last one year.

Unless there is a serious concern, from an investor's perspective, I would advise my friends to

invest in the company for so long, since a payout ratio of more than 100% is the best. Another

point of concern is checking if the free cash flow generated is enough to cater for dividends.

AstraZeneca paid out 100% of its free cash flow, which is a bit concerning if the cash flow is not

projected to improve (Ucha, 2015). Since the AstraZeneca’s dividends were well covered by

earnings and cash flow, I would advise my friends to invest since these dividends are not at risk

in the long term.

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Running head: INVESTING AT ASTRAZENECA Investing At AstraZeneca Name: Institution: Date 1 2 INVESTING AT ASTRAZENECA Investing At AstraZeneca Investing in a strong business and that reinvests its dividends to profits is one of the most attractive ways of growing your wealth. Sometimes investors buy popular dividend stock due to its yield, but later lose their money when the dividends from such a company don't yield the anticipated results. Many investors find AstraZeneca amazing since it yields 3.3% and has paid dividends for more than ten years. Most investors have purchased the company shares due to the amount of income it brings (Viña et al., 2019). This paper will examine different reasons why someone would choose to invest in AstraZeneca. Payout Ratios The company pays its dividends based on its earnings. If a company pays more dividends than it earned, then the dividend might be unsustainable which a hard ideal situation. The simplest way of checking whether the company's dividend is sustainable is by comparing its dividend payment against its net profit after tax. Looking at our previous data analysis, it is evident that 164% of AstraZeneca's profits were remitted as dividends for the last one year. Unless there is a serious concern, from an investor's perspective, I would advise my friends to invest in the company for so long, since a payout ratio of more than 100% is the best. Another point of concern is checking if the free cash flow generated is enough to c ...
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Tags: Investing At AstraZeneca Payout Ratios Strength of AstraZenecas Balance Sheet Dividend Volatility Depressed Prices