1. Viatris Inc. (NASDAQ:VTRS)
Number of Hedge Fund Holders: 50
Share Price as of the Close of July 31: $12.06
Viatris Inc. (NASDAQ:VTRS) tops our list of the best dividend stocks under $15. The American pharmaceutical company specializes in a wide variety of therapeutic areas. The company spun off from Pfizer in 2020. It reported strong results in the first quarter of 2024. The company’s Brands segment performance shows substantial growth in emerging markets and Europe. The segment generated revenue of $2.3 billion, which declined by nearly 5% from the same period last year. Its overall revenue came in at $3.66 billion, down 2% from the prior-year period. Despite the decline, the company continued to perform well in advancing its product pipeline. In the first quarter, its new products generated $154 million in revenue.
Viatris Inc. (NASDAQ:VTRS) boasts a solid balance sheet and a strong cash position, which the company has been actively utilizing to return cash to shareholders. In the most recent quarter, the company reported an operating cash flow came in at $615 million and its free cash flow amounted to $565 million. The free cash flow was sufficient to return $393 million to shareholders through dividends and share repurchases.
Although Viatris Inc. (NASDAQ:VTRS) has a strong balance sheet and generates solid cash flow, it also carries significant debt, amounting to $18.2 billion as of the most recent quarter. Analysts suggest that a substantial portion of the company’s free cash flow will need to be allocated towards reducing this debt. However, with new products in development, the company’s cash flow remains a relatively minor concern for investors. In addition, its dividend appears to be safe as the company spends about $600 million in annual dividend payments.
Viatris Inc. (NASDAQ:VTRS) currently pays a quarterly dividend of $0.12 per share and has an impressive dividend yield of 4.04%, as of August 1. Since the company initiated its dividend policy in 2021, investors might not anticipate significant dividend increases. This is due to the high interest costs, which suggest that the company is likely to focus on strengthening its balance sheet rather than raising its dividend payouts.
The number of hedge funds holding stakes in Viatris Inc. (NASDAQ:VTRS) jumped to 50 in Q1 2024, from 43 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of nearly $1.2 billion. Among these hedge funds, Deerfield Management was the company’s leading stakeholder in Q1.
While we acknowledge the potential of VTRS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than VTRS but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
