VTRS - Upcoming Catalysts Position Perrigo For Sustained Long-Term Dividend Growth

2024-04-09 05:49:33 ET

Summary

• After nearly a decade of struggles, Perrigo is poised to turn the corner under the leadership of a new CEO who is only nine months in the seat.
• Infant formula woes will be resolved in Q2 and comparisons year over year will start to be favorable in the second half of 2024.
• Focus on total shareholder returns to be unveiled at the investor day in the fall could be a catalyst for the shares.
• Opill, the first OTC birth control pill in the USA, could be a surprise revenue generator and is an example of new innovation and branding strategy for Perrigo.
• Strategy for improving gross margins on USA store brand business is practical and can drive profit with only modest cash investment.

Perrigo (PRGO) has increased dividends for 20 consecutive years, and I believe the initiatives outlined by the new CEO will propel Perrigo to Dividend Champion status and beyond. There are five potential catalysts forthcoming in 2024 that could support a share price increase. When combined with a depressed share price that is a result of a tumultuous decade, the shares seem to have found support and offer an attractive dividend yield and prospects for dividend growth.

Company Overview

Perrigo is a leading provider of over-the-counter medications and therapeutic products, primarily in the USA, Canada, Europe and Australia. According to the company in its latest 10-K , it is the "leading store brand private label provider of self-care products in many categories including upper respiratory, nutrition and women's health" at 49% market share according to an internal study cited in the 2023 Investor Day presentation . Healthcare is a long-term growth sector as populations age globally and the inherent human desire to live longer and more vibrant lives....

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