Sometimes winning isn't about sprinting. It's about starting early, and this ASX dividend share looks like it's back in the race.
Sonic Healthcare Ltd (ASX: SHL) shares have declined by 17% in value over the past 12 months. Since the end of August, the ASX dividend share has experienced a steady decline to $22.80 at the time of writing.
Many analysts believe now is the time to consider the seventh largest ASX 200 healthcare share by market capitalisation.
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Plumber of modern medicine
Sonic Healthcare made its name doing the unglamorous but essential stuff: pathology and diagnostic imaging. It specialises in blood tests, biopsies, and scans — the plumbing of modern medicine.
It's boring, sure. But boring can be beautiful when cash flows are steady, and demand refuses to go away.
After riding a pandemic sugar hit, the ASX dividend share spent the past couple of years sobering up. COVID testing revenue faded, margins tightened, and investors wandered off in search of shinier stories.
Ageing population, healthy balance
Expectations around Sonic Healthcare are now lower, and that's often where opportunity sneaks in. Its underlying business is solid with a healthy balance sheet, the company has a bright future fuelled by an ageing global population, and it reported sound full-year results.
In FY 2025, the company delivered revenue of $9.6 billion, up 8% year over year. The net profit increased by 7% to $514 million, and EBITDA rose 8%, while operating cash flow also surged by 21%.
The ASX stock has leveraged its strong cash flows – bolstered during the COVID pandemic – to fund acquisitions in Germany and the US, as well as investments in digital pathology and AI. This could drive future growth.
Risks? Plenty. Government funding pressures, wage inflation, and regulatory changes can all bite.
What do analysts think?
According to Bell Potter, the ASX dividend share is a good choice for investors seeking income opportunities. The broker expects Sonic Healthcare's earnings to rise due to cost-cutting, recent acquisitions, and increased activity at its labs and clinics returning to pre-pandemic levels.
Bell Potter forecasts dividends of $1.09 per share in FY 2026 and $1.11 in FY 2027. With Sonic shares currently at $22.80, this would result in a dividend yield of 4.8% and 4.9%.
The broker has assigned a buy rating and a $33.30 price target to its shares. Based on the share price at the time of writing, this implies a potential upside of 33% for investors over the next 12 months.
Bell Potter is on the bullish side, as the average 12-month target price is $26.51. However, that still points to a 16% upside and could bring the total gain in 2026 to well over 20%.
