Since posting a high of $84.00 last September, shares of Ramsay Heath Care have dropped almost 20% to below 67.50 today.
This decline has adjusted the share price to 26 X estimated 2017 earnings. While this multiple is not cheap, it looks like fair value considering Ramsay’s strong long-term growth prospects and dividend history.
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Since the private hospital operator started paying dividends in 2007, it has increased its payout to shareholders every singe year. This is a streak that includes 21 consecutive dividend increases.
Based on the last 12 months of dividends, Ramsay’s shares are currently offering a fully-franked 4.8% yield, which tips up to almost 7% when the franking credits are included.
Further, the company has given guidance that 2017 profits could increase by 20%.
