This Company Just Initiated a Quarterly Dividend: Time to Buy?

Core Viewpoint - Regeneron Pharmaceuticals reported strong fourth-quarter and full-year 2024 earnings, exceeding analyst estimates, and announced its initiation of a quarterly dividend, leading to a 5% increase in its stock price [1][2]. Financial Performance - Regeneron's revenue increased by 10% year over year to $3.79 billion, with combined U.S. sales of Eylea and Eylea HD reaching $1.5 billion, a 2% increase from the previous year [9]. - The company initiated a quarterly dividend of $0.88 per share, resulting in a forward dividend yield of 0.50% [3][4]. Competitive Position - Regeneron's dividend per share is competitive compared to other major biotech and pharmaceutical companies, although it is still early in its dividend-paying journey [2][3]. - The company faces competition for Eylea from Roche and biosimilar challenges from Amgen's Pavblu, but it is ramping up Eylea HD, which offers more dosing flexibility [7][10]. Growth Drivers - Dupixent, Regeneron's eczema treatment, saw fourth-quarter global sales increase by 15% year over year to $3.7 billion, with analysts projecting potential annual sales of $20 billion due to a new COPD indication [11][12]. - Regeneron has a robust pipeline with several dozen programs aimed at expanding its oncology presence, which is expected to lead to significant approvals in the future [12]. Capital Allocation - The company announced an increase in its share repurchase capacity by $3 billion to $4.5 billion, indicating a preference for share buybacks over dividend increases [13][14]. - Management emphasizes that share repurchases will remain the primary method of returning capital to shareholders, although there is potential for future dividend increases [14].