St. Jude Medical (STJ) announced a fiscal 4Q16 cash dividend of $0.31 per share on December 9, 2016. The dividend will be payable on January 31, 2017, to shareholders of record as of January 13, 2017. St. Jude Medical’s annual dividend payout amounted to $1.24 per share in fiscal 2016.
The dividend is payable provided that the Abbott Laboratories (ABT) acquisition of St. Jude Medical doesn’t come into effect before the close of business on the record date. Abbott Laboratories has announced a 1Q17 quarterly dividend payment of $0.27 to be payable on February 15, 2017, to shareholders of record as of January 13, 2017. If the acquisition becomes active before the close of business on the record date, St. Jude shareholders will get dividends on the Abbott shares they receive against the St. Jude shares they hold as of record date of Abbott’s dividend payout. As shown in the below diagram, Abbott and St. Jude assert that the acquisition will be favorable for the shareholders of both the companies and will provide long-term value.
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The company has consistently increased dividends to its shareholders for the last five years. To learn more about the company’s capital allocation strategy, read How St. Jude’s Capital Allocation Strategy Affects Shareholders.
St. Jude Medical generated ~$716 million in free cash flows at the end of 3Q16. It has a strong balance sheet with ~$394 million in cash and cash equivalents.
On December 29, 2016, St. Jude Medical’s annual payout ratio stands at 37.3%. It has a dividend yield of ~1.5%. Peers Medtronic (MDT), Stryker (SYK), and Becton, Dickinson and Company (BDX) have dividend yields of ~2.4%, 1.4%, and 1.8%, respectively.
If you’re interested in getting exposure to St. Jude Medical, you can invest in the iShares Core S&P 500 ETF (IVV), which holds ~0.12% in the company.