Overview: Sonic Healthcare Limited (SHL) is an international medical diagnostics company, offering laboratory medicine/pathology and radiology services to the medical community. The company is structured as a decentralised federation of medically-led diagnostic practices, with the head office in Sydney, Australia. SHL provides the services and infrastructure in eight countries: Australia; New Zealand; the UK; Germany; Switzerland; Belgium; Ireland; and the USA. The domestic strategy is to retain cost leadership through the reinvestment of capital into new technology. The building of new facilities delivers cost savings through leveraging new technology.
Dividend and Investment View: Sonic Healthcare Limited (SHL) has delivered steady growth in the past few years. The full-year results for FY14 have shown a 12.3% increase in revenue and a 14.9% increase in net profit. SHL’s P/E ratio is in line with the sector standard and the stock can therefore be considered as fairly valued. The total dividend increased by 8.1% to 67c per share and the final dividend is 40c, 55% franked. The company expects 5% EBITDA growth, however, many analysts believe SHL will be able to beat these expectations. A well-positioned company, good dividend yield, and a favourable long-term outlook make SHL a solid dividend play. The ex-dividend day is 5th September 2014 with a record date of 9th September 2014.
Please note: The recommendations of the Dividend Portfolio have a medium to long-term outlook and are not part of the Active Investor’s Portfolio.
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