FTSE 100 pharma giant AstraZeneca (LSE: AZN) has been a reliable dividend payer in recent years. But the stock’s yield isn’t that high. Is the company set to increase its payout going forward? Let’s take a look at the AstraZeneca dividend forecast for this year.
Dividend history
Before I dive into the forecast, it’s worth looking at AstraZeneca’s recent dividend history to put things in context.
Last week, the company declared a dividend payout of $1.97 (the company talks about its dividends in US dollars) per share for the second half of 2022. That took the total payout for FY22 to $2.90 per share.
For the previous year (FY21), the payout was $2.87. Meanwhile, for the three years before that (FY18-20), the payout was $2.80 a share each year.
So, after a period of no dividend growth, the payout now appears to be rising slowly. This is encouraging. A static dividend payout can be frustrating for shareholders as inflation erodes the value of the income stream. A static payout can also indicate that the company is experiencing some challenges.
This year’s forecast
As for the 2023 expectation, City analysts currently think AstraZeneca will reward investors with a payout of $3.06 per share. That would represent a third consecutive increase. At the current exchange rate and share price, that projected payout equates to a yield of around 2.2%.
It’s worth pointing out, however, that there’s no guarantee the company will deliver that number. Analysts’ forecasts can be off the mark at times. We’ve seen this recently. For 2022, analysts were actually expecting $2.95 per share from AstraZeneca – higher than the $2.90 figure declared last week.
Worth buying?
Are AstraZeneca shares worth buying today?
Well, to my mind, they do look relatively attractive right now.
Last week’s full-year results were pretty solid, with revenue rising 25% to $44.4bn and core earnings per share (EPS) climbing 33% to $6.66.
And the company was optimistic about the future, stating that it expects to deliver solid top-line growth through 2025.
Our R&D success and revenue increase in 2022 demonstrate that we are on track to deliver industry-leading revenue growth through 2025 and beyond, and have set AstraZeneca on a path to deliver at least 15 new medicines before the end of the decade.
AstraZeneca CEO Pascal Soriot
As for the stock’s valuation, it seems pretty reasonable to me. With analysts pencilling in EPS of $7.30 for 2023, the forward-looking price-to-earnings (P/E) ratio here is 19. That’s considerably lower than the multiple on a lot of US pharma stocks.
Of course, such stocks do have their risks. However, all things considered, I see a fair bit of appeal in AstraZeneca shares right now. I’ve added the stock to my watchlist.
