INCREDIBLY CHEAP DIVIDEND STOCK (On My Watchlist)

I'm excited to share a cheap dividend stock trading at a PE ratio of 4.44 and a starting dividend yield of 4.85%. With a payout ratio of only 21.5%, I see an opportunity for a possible 10% dividend yield-on-cost over time. Of course, there are risks, especially long-term debt (which management is actively reducing). I look forward to sharing my dividend analysis strategy, with Viatris (VTRS) as the case study in today's video.

Timestamps:
0:00 INTRODUCTION
0:11 Check out the pinned comment below for a link to my Patreon.
0:48 I'm speaking on-stage tomorrow at Blossom Investor Tour Toronto about income investing.
1:19 Check out the pinned comment for a link to Blossom Investor Tour Chicago. (Disc: I'm long Blossom. I'm a Blossom affiliate.)
1:33 I met Brandon Beavis and Marc Beavis in-person! I've known Brandon since 2018 online.
3:20 VIATRIS (VTRS) DIVIDEND STOCK ANALYSIS
4:01 SLIDE 1: VIATRIS Q2 EARNINGS RELEASE (WHAT IS VTRS ALL ABOUT THESE DAYS)
4:50 What is Viatris? Upjohn and Mylan.
5:04 VTRS has always had a lot of debt.
5:24 Multi-year restructuring with many divestitures to pay down long-term debt.
5:54 Phase 3: They are buying drugs late in the FDA approvals pipeline. (Could solve their shrinking earnings over time.)
6:26 Shrinking revenue and earnings over time in the generics business.
7:24 SLIDE 2: CAPITAL ALLOCATION STRATEGY
7:35 Returning capital to shareholders (repurchases and dividends).
8:08 Starting dividend yield of 4.85%.
8:32 If I buy VTRS, it would be an ancillary position.
8:58 VTRS ties into the current healthcare industry narrative. Could they reduce system healthcare costs?
9:59 SLIDE 3: DIVESTITURES
10:36 Completion of all divestitures.
11:00 SLIDE 4: COMPANY FINANCIAL GUIDANCE
11:12 Adjusted EPS guidance of $2.23
11:40 SLIDE 5: BALANCE SHEET ANALYSIS
12:06 Big Insight: Long-term debt is going down (even this year it goes down).
12:50 SLIDE 6: INCOME STATEMENT ANALYSIS
13:00 Sales are dropping: Divestitures and generics business.
13:41 Annuity Model (Land Lease Deal)
14:10 Metrics are negative due to non-cash impairment charges.
14:46 SLIDE 7: STATEMENT OF CASH FLOWS ANALYSIS
15:12 Positive cash flows from operations.
15:35 Major impairment of goodwill.
16:47 Dividend appears to be covered by operating cash flow.
17:15 SLIDE 8: PPC IAN EXCEL ANALYSIS OF VTRS STOCK
17:44 Forward PE is about 4.44.
17:56 Dividend yield is 4.85%.
18:04 Comparison vs. my classic VTRS videos.
18:58 EPS has really dropped over time (this is a big risk factor).
19:29 EPS Erosion is the risk with VTRS.
20:36 Promising trend: Long-Term Debt is down 29% since 2022.
21:09 I'd like to see debt trend even lower.
21:23 SUMMARY OF VTRS DIVIDEND STOCK
21:56 I'm not looking for growth, I'm looking for them to hold the line.
22:06 Dividend yield-on-cost could get to 10% over time.
22:46 Check out the pinned comment below for my affiliate link to Blossom Social. (Disclosure: I'm an affiliate of Blossom Social.)
23:25 DISCLOSURE AND DISCLAIMER

DISCLOSURE: I'm long Starbucks (SBUX) and Pfizer (PFE). I own these stocks in my personal stock portfolio. I'm long Blossom. I may initiate a position in Viatris (VTRS).

DISCLOSURE: I'm an affiliate of Blossom Social. I'm compensated for Blossom sign-ups. I'm long Blossom.

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