Hearing implant maker, Cochlear Limited (ASX: COH) is expected to report its full year financial results tomorrow. Shareholders will no doubt be eagerly awaiting the results, given the issues the company has run into and expectations that the company could disappoint.
Cochlear is the most shorted stock on the ASX, not surprisingly perhaps, given earnings before interest and tax (EBIT) fell $36.4 million in 2013 compared to the previous year, and normalised net profit after tax fell 16%.
Now we know how Australians love their fully franked dividends, so let's take a look at what we might expect from Cochlear tomorrow.
In 2013, from earnings per share of $2.32, Cochlear paid $2.52 in partly franked dividends, with the company stating that it was still confident of its long term sustainable growth – hence its decision to pay out more in dividends.
This year, analysts have pencilled in earnings of around $1.92 per share for the full year, but still expect Cochlear to reward shareholders with $2.54 in dividends, likely to be unfranked. In the six months to December 2013, the company paid $1.27 in dividends, despite net profit falling 73%. Going on the previous half's results, investors may receive another $1.27 in dividends.
At current prices of around $62.54, shareholders are receiving a dividend yield of around 4%, although it's not fully franked, given Cochlear earns a majority of its income offshore.
That's not bad, from a company that holds a dominant market share in the hearing implant market globally, and has grown sales over the last decade at 11.6% each year (on average).
As a shareholder, I'll be hoping tomorrow's result signals a turnaround in the company's performance, and we can leave the disappointing results of the last few years behind us.
