Today's Earnings Valued Attractively (Teva)
Teva works across the board to develop, produce and market a wide range of products within specialty medicines, generic and over-the-counter products, active pharmaceutical ingredients and new therapeutic entities.
In the United States alone, Teva markets approximately 400 generic products in about 1,300 dosage strengths. The company also operates in 59 other countries across Europe and the rest of the world, and is perhaps best known for Copaxone, which is used to treat multiple sclerosis.
For those unfamiliar with the business behind the company, we can instantly look at Teva's past operating results through the lens of F.A.S.T. Graphs.
Here a picture is truly worth a magnitude of words. We see that Teva has grown operating earnings by nearly 24% a year for the past decade and a half and demonstrated a commitment to increasing the dividend while simultaneously keeping the earnings payout ratio quite low.
Additionally, it should be noted that Teva had exceptional earnings per share growth in the early 2000s and has since begun to moderate a bit. To be fair, even recently this pharmaceutical company has been able to grow earnings at a double-digit rate.
It follows that the return performance of Teva is also likely to be quite strong over the same period. This is precisely what we see: A shareholder beginning at the end of 1998 and holding until today would have seen capital appreciate over 15%, a dividend that grew by about 28% a year and total returns -- not to mention income provided -- that bested the S&P 50 five times over.
There's a reason that Teva recently showed up on a Value Line screen titled "Stocks for Dividend Growth With Low Risk."
The company has an absolutely excellent track record of returning shareholder value. Given this history, coupled with a low payout ratio and above-average dividend yield, it would seem that Teva is well poised to continue churning out profits for its shareholders.