STERIS Plc : STE-US: Dividend Analysis : November 23rd, 2016 (record date) : By the numbers : January 23, 2017

Our analysis is based on comparing STERIS Plc with the following peers – Hill-Rom Holdings, Inc., Stryker Corporation, Cantel Medical Corp., Invacare Corporation, Thermo Fisher Scientific Inc., Owens & Minor, Inc., Johnson & Johnson, CONMED Corporation, Ecolab Inc. and 3M Company (HRC-US, SYK-US, CMD-US, IVC-US, TMO-US, OMI-US, JNJ-US, CNMD-US, ECL-US and MMM-US).

STERIS Plc’s dividend yield is 1.54 percent and its dividend payout is 52.55 percent. This compares to a peer median dividend yield of 1.29 percent and a payout level of 38.89 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 67 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2016), STE-US paid a medium quality dividend, which represents a yield of 1.50% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality, 2 were medium quality and 1 was low quality.
  • The ending cash balance, with a dividend coverage of 3.10x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to September 30, 2016), STE-US paid a medium quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 4.43x), investing cash flow (coverage of -5.82x), issuance cash flow (coverage of 3.68x) and twelve-month prior cash (coverage of 1.98x), for a total dividend coverage of 4.10x.

STE-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.61x). Thus, the total coverage including share buybacks is 4.71x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.

Dividend History

Item 2012-03-31 2013-03-31 2014-03-31 2015-03-31 2016-03-31 Latest
Dividend Yield (%) 2.11 1.77 1.72 1.28 1.07 1.54
Dividend Payout (%) 28.57 27.21 37.79 40 62.82 52.55

A complete list of metrics and analysis is available on the company page.

Company Profile

STERIS Plc engages in the manufacture of surgical and other medical supplies. It operates through the following segments: Healthcare Products, Healthcare Specialty Services, Life Sciences and Applied Sterilization Technologies. The Healthcare Products segment offers infection prevention and procedural solutions for healthcare providers worldwide, including capital equipment and related maintenance and installation services, as well as consumables. The Healthcare Specialty Services segment provides a range of specialty services for healthcare providers including hospital sterilization services, instrument and scope repairs, and linen management. The Life Sciences segment offers capital equipment and consumable products, and equipment maintenance and specialty services for pharmaceutical manufacturers and research facilities. The Applied Sterilization Technologies segment offers a contract sterilization and laboratory services for medical device and pharmaceutical Customers and others. The company was founded on October 9, 2014 and is headquartered in Leicester, United Kingdom.


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