How does the CSL (ASX:CSL) dividend compare to its sector?

We look at how the CSL dividend measures up against its rivals.

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The CSL Limited (ASX: CSL) dividend ticked up a notch last earnings season due to the company outperforming its guidance. In particular, the global biotech’s CSL Behring and Seqirus business delivered robust growth in FY21.

The surging profits led the company to give back to its shareholders, reflecting its consistent dividends policy.

But let’s see how the CSL dividend stacks up against its rivals.

How does the CSL dividend stack up?

CSL is set to pay a fully franked final dividend of $1.59 per share to eligible investors on 30 September.

When combined with its interim dividend of $1.35 apiece, this brings the total FY21 dividend to $2.94, equalling FY20. It’s worth noting the board declared the first-half FY20 dividend payment (147 cents) just before the COVID-19 pandemic set in.

Based on the closing CSL share price of $312.01 last week, this gives a dividend yield of 0.94%.

What about its competitors?

The company’s main direct competitors are Spanish company Grifols (NAS: GRFS) and Japanese-owned Takeda Pharmaceutical Company (NYSE: TAK). However, as they are both not listed on the ASX, we take a look at Sonic Healthcare Ltd (ASX: SHL) and Ramsay Health Care Ltd (ASX: RHC).

By comparison, Sonic Healthcare rewarded its shareholders with a partially-franked final dividend of 55 cents per share on 22 September.

The full-year dividend, comprising of an interim dividend of 36 cents apiece, equates to 91 cents per share. This represents a 7.1% lift on the prior full-year dividend (FY20).

The Sonic Healthcare share price finished last week at $40.59 which gives it a dividend yield of 2.24%.

Its other competitor in the sector, Ramsay Health Care, is on track to distribute a final dividend of $1.03 per share to shareholders on 30 September. The company’s interim dividend for the FY21 period came to 48.5 cents a pop, translating to a full-year dividend of $1.515.

Calculating using the last price of $69.26 for Ramsay Health Care shares, this is a dividend yield of 2.19%. 

Comparing the CSL dividend yield against its peers may be one point to consider when investing. However, it is important to also look at the total shareholder return for the past 12 months.

As such, CSL shares have gained 5% for the period, while Sonic Healthcare and Ramsay Health Care shares have moved up 20% and 1 respectively.

Are CSL shares a buy?

A number of brokers weighed in after the company released its full-year results in mid-August.

Analysts at Jefferies slapped a “hold” rating on the CSL share price, cutting its outlook by 1.7% to $327.85. On the other hand, Morgans and Credit Suisse raised their price targets by 7.7% to $324.40 and 1.6% to $315.00 respectively.

However, the most recent broker note came from Citi which also raised its view on CSL shares by 4.8% to $325.00. Based on the current share price, this implies an upside of around 4.1% on Citi’s assessment.

CSL commands a market capitalisation of roughly $142.17 billion, making it the second-largest company on the ASX.

Should you invest $1,000 in CSL right now?

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Motley Fool contributor Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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