This article first appeared on GuruFocus .
A Deep Dive into Terumo Corp's Upcoming Dividend and Financial Health
Terumo Corp ( TRUMF ) recently announced a total dividend of $0.11 per share, with the ex-dividend date set for September 29, 2026. This upcoming distribution consists entirely of a $0.11 per share cash dividend, though the specific payable date has not yet been confirmed by the company. As investors look forward to this payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's look into Terumo Corp's dividend performance and assess its sustainability. Understanding these metrics is crucial for value investors seeking reliable income streams and long-term capital appreciation in the healthcare sector.
What Does Terumo Corp Do?
-
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
-
How to calculate the intrinsic value of a stock?
-
Is TRUMF fairly valued? Test your thesis with our free DCF calculator.
Terumo Corp is a Japanese medical device manufacturer headquartered in Tokyo. Founded in 1921 as a clinical thermometer producer, it has grown into a diversified global supplier of medical products organized around its Cardiac and Vascular, Medical Care Solutions, and Blood and Cell Technologies segments. Its portfolio includes vascular interventional devices such as catheters, guidewires and stent grafts, cardiopulmonary bypass systems, prefilled syringes, infusion and injection devices, diabetes care products including insulin patch pumps, and blood collection and processing systems. Customers include hospitals, clinics, blood centers, and healthcare professionals worldwide. Terumo generates revenue primarily through the sale of disposable medical devices and equipment, supplemented by service and maintenance income. It operates across Japan, North America, Europe, Asia and other regions, with North America and Japan among its largest markets.
A Glimpse at Terumo Corp's Dividend History
Terumo Corp has maintained a consistent dividend payment record since 2008, demonstrating a long-standing commitment to returning capital to shareholders. Dividends are currently distributed on a bi-annual basis, providing investors with regular income intervals. This consistent history is a positive signal for income-focused investors, as it suggests a degree of reliability and financial discipline. Below is a chart showing annual Dividends Per Share for tracking historical trends, illustrating the company's steady progression over the years.
Breaking Down Terumo Corp's Dividend Yield and Growth
As of today, Terumo Corp currently has a 12-month trailing dividend yield of 1.30% and a 12-month forward dividend yield of 1.57%. This discrepancy suggests an expectation of increased dividend payments over the next 12 months, which is a promising sign for shareholders. While the yield may appear modest compared to some high-dividend sectors, it is important to consider the company's growth trajectory and the potential for capital appreciation alongside the income generated.
Over the past three years, Terumo Corp's annual dividend growth rate was 14.50%. Extended to a five-year horizon, this rate increased to 15.40% per year. And over the past decade, Terumo Corp's annual dividends per share growth rate stands at an impressive 11.50%. These figures indicate that the company has not only been paying dividends but has been consistently increasing them at a rate that outpaces inflation, thereby enhancing the real value of shareholder returns over time.
Based on Terumo Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Terumo Corp stock as of today is approximately 2.66%. This metric is particularly useful for long-term investors as it estimates the effective yield on an investment based on the original purchase price, assuming dividend growth continues at the historical rate.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of June 30, 2026, Terumo Corp's dividend payout ratio is 0.27, indicating that the company retains the majority of its earnings to reinvest in the business while comfortably covering its dividend obligations.
Terumo Corp's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Terumo Corp's profitability 9 out of 10 as of June 30, 2026, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability and ability to generate consistent cash flows.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Terumo Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. This strong ranking implies that the company is effectively expanding its business, which is essential for supporting future dividend increases and maintaining financial health in a competitive landscape.
Revenue is the lifeblood of any company, and Terumo Corp's revenue per share , combined with the 3-year revenue growth rate , indicates a strong revenue model. Terumo Corp's revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 70.6% of global competitors. This consistent top-line growth provides a solid foundation for continued dividend payments.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Terumo Corp's earnings increased by approximately 16.20% per year on average, a rate that outperforms approximately 59.18% of global competitors. Furthermore, the company's 5-year EBITDA growth rate of 14.30% outperforms approximately 63.22% of global competitors, highlighting strong operational efficiency and cash generation potential.
Conclusion: A Reliable Dividend Growth Story
In conclusion, Terumo Corp presents a compelling case for value investors seeking a blend of income and growth. The company's low payout ratio of 0.27, coupled with its high profitability rank of 9/10 and strong growth rank of 9/10, suggests that its dividend is not only sustainable but also likely to continue growing. The consistent double-digit dividend growth rates over the past three, five, and ten years further reinforce this positive outlook. While the current yield may be modest, the potential for increasing yield on cost makes it an attractive long-term holding. As the medical device industry continues to evolve, Terumo Corp's diversified portfolio and global reach position it well to navigate future challenges and opportunities.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener .
