On February 4, Quest Diagnostics Incorporated (NYSE: DGX) announced that it would raise its dividend payment by 10.7%. Its quarterly payments would now be $ 0.62, up from $ 0.56. This is the 10th time the company has increased its dividend payments since 2011.
On an annual basis, this means that investors earn 2% in dividend income. At an investment of $ 25,000, you could expect to earn around $ 500 each year. And that number will increase if Quest announces more rate hikes.
There is even more good news for investors, as Quest’s Board also gave the green light for more share repurchases and increased the current license by 1 billion. $. Share repurchases are valuable to investors because they help increase the value of a stock. And with fewer outstanding stocks, earnings multiples also look better, which could lead to more bullishness around a stock whose investors see a better bottom line.
Over the past 12 months, Quest’s stock has risen 13%. The company’s test business has been doing well in the midst of the pandemic as volumes have been rising. In the fourth quarter, Quest reported annual sales growth of 55.8%, reaching $ 3 billion. Net income of $ 609 million was also more than double the $ 265 million profit that the company posted a year ago.
With Quest ‘stock trading with a relatively modest price-to-earnings ratio of 12, it still provides a reasonably cheap investment. And with plenty of potential growth still on the way, as the pandemic is still far from over, Quest could continue to be a bargain in 2021 and beyond.
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