ResMed Inc (ASX: RMD) shares are bucking the wider selling action today.
The S&P/ASX 200 Index (ASX: XJO) healthcare stock closed on Friday trading for $27.47 a share. In early afternoon trade on Monday, shares are swapping hands for $27.77, up 1.1%.
For some context, the ASX 200 is down 0.8% at this same time.
That's today's share price action.
Now, should I snap up some ResMed shares before the stock trades ex-dividend?
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What's going on with the ResMed dividend?
ResMed reported its quarterly and full-year results on 4 August.
Despite revenue increasing 18% year on year to US$4.2 billion, ResMed shares closed down 9.3% on the day. That fall looks to have been driven by a 0.80% decline in the company's gross margin, which dipped to 55.8%.
As for passive income, management declared a quarterly cash dividend of 4.8 US cents per share, unfranked.
If I want to bank that dividend, I'll need to own ResMed shares by market close tomorrow, 15 August. The stock trades ex-dividend on Wednesday.
Eligible shareholders can expect to receive that payout on 21 September.
So, should I grab some stock in time to bag the dividend?
Well, no.
At least, not for the dividend alone.
At the current exchange rate, the dividend equates to around 7.4 Aussie cents per share. Which at the current share price of $27.77 just isn't that attractive if I'm hunting for passive income.
Though that doesn't mean ResMed shares might not represent good value at their current levels.
Following the company's full-year results, Goldman Sachs maintained its 'buy' rating on the healthcare stock.
Although the broker reduced its 12-month price target by 3% to $38.40 a share, that's still 38% above today's price.
According to Goldman, ResMed shares trade "at a (15)% discount to its 5yr avg market-relative P/E and on 2.1x growth (vs. sector on 1.9x), which we feel represents an attractive risk-reward in the context of various near/long-dated tailwinds".
The broker said:
In our view, the company looks set to emerge from the pandemic/recall with a sustainable double-digit increase in market share, and despite much debate around pharmaceutical threats to CPAP demand in OSA, we see few realistic scenarios that would trouble a double-digit growth trajectory through the medium-term.
How have ResMed shares been tracking?
ResMed shares have yet to recover from the steep sell-off during the week following its results announcement. Shares are down 8% in 2023.
