AMGEN INC (AMGN)
US0311621009 - Common Stock
We assign a fundamental rating of 5 out of 10 to AMGN. AMGN was compared to 588 industry peers in the Biotechnology industry. While AMGN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AMGN is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year AMGN was profitable.
AMGN had a positive operating cash flow in the past year.
AMGN had positive earnings in each of the past 5 years.
AMGN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.91%, AMGN belongs to the top of the industry, outperforming 96.40% of the companies in the same industry.
The Return On Equity of AMGN (107.78%) is better than 99.83% of its industry peers.
AMGN has a better Return On Invested Capital (9.05%) than 96.58% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AMGN is in line with the industry average of 13.58%.
The 3 year average ROIC (14.42%) for AMGN is well above the current ROIC(9.05%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.91% | ||
| ROE | 107.78% | ||
| ROIC | 9.05% |
ROA(3y)8.87%
ROA(5y)10.26%
ROE(3y)124.9%
ROE(5y)106.6%
ROIC(3y)14.42%
ROIC(5y)15.39%
1.3 Margins
AMGN's Profit Margin of 23.83% is amongst the best of the industry. AMGN outperforms 98.29% of its industry peers.
AMGN's Profit Margin has declined in the last couple of years.
AMGN has a Operating Margin of 28.96%. This is amongst the best in the industry. AMGN outperforms 98.29% of its industry peers.
AMGN's Operating Margin has declined in the last couple of years.
AMGN's Gross Margin of 70.16% is amongst the best of the industry. AMGN outperforms 84.59% of its industry peers.
In the last couple of years the Gross Margin of AMGN has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.96% | ||
| PM (TTM) | 23.83% | ||
| GM | 70.16% |
OM growth 3Y-6.95%
OM growth 5Y-8.35%
PM growth 3Y-5.87%
PM growth 5Y-7.58%
GM growth 3Y-2.54%
GM growth 5Y-3.25%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AMGN is creating value.
AMGN has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AMGN has been reduced compared to 5 years ago.
AMGN has a worse debt/assets ratio than last year.
2.2 Solvency
AMGN has an Altman-Z score of 1.30. This is a bad value and indicates that AMGN is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AMGN (1.30) is better than 67.47% of its industry peers.
AMGN has a debt to FCF ratio of 8.78. This is a slightly negative value and a sign of low solvency as AMGN would need 8.78 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 8.78, AMGN belongs to the best of the industry, outperforming 94.52% of the companies in the same industry.
AMGN has a Debt/Equity ratio of 10.14. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 10.14, AMGN is doing worse than 85.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.14 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 1.3 |
ROIC/WACC1.15
WACC7.89%
2.3 Liquidity
AMGN has a Current Ratio of 1.65. This is a normal value and indicates that AMGN is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.65, AMGN is doing worse than 80.65% of the companies in the same industry.
A Quick Ratio of 1.13 indicates that AMGN should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.13, AMGN is doing worse than 85.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.65 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.43% over the past year.
AMGN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.29% yearly.
AMGN shows a small growth in Revenue. In the last year, the Revenue has grown by 7.09%.
The Revenue has been growing slightly by 3.49% on average over the past years.
EPS 1Y (TTM)5.43%
EPS 3Y3.96%
EPS 5Y5.29%
EPS growth Q2Q15.16%
Revenue 1Y (TTM)7.09%
Revenue growth 3Y3.5%
Revenue growth 5Y3.49%
Revenue growth Q2Q19.84%
3.2 Future
The Earnings Per Share is expected to grow by 3.90% on average over the next years.
Based on estimates for the next years, AMGN will show a small growth in Revenue. The Revenue will grow by 4.01% on average per year.
EPS Next Y6.94%
EPS Next 2Y7.56%
EPS Next 3Y6.87%
EPS Next 5Y3.9%
Revenue Next Year17.29%
Revenue Next 2Y10.15%
Revenue Next 3Y7.56%
Revenue Next 5Y4.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.64, which indicates a correct valuation of AMGN.
Compared to the rest of the industry, the Price/Earnings ratio of AMGN indicates a rather cheap valuation: AMGN is cheaper than 97.60% of the companies listed in the same industry.
AMGN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.25.
AMGN is valuated correctly with a Price/Forward Earnings ratio of 13.69.
Based on the Price/Forward Earnings ratio, AMGN is valued cheaply inside the industry as 97.77% of the companies are valued more expensively.
AMGN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.64 | ||
| Fwd PE | 13.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AMGN is valued cheaply inside the industry as 95.89% of the companies are valued more expensively.
96.92% of the companies in the same industry are more expensive than AMGN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.88 | ||
| EV/EBITDA | 16.34 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AMGN does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of AMGN may justify a higher PE ratio.
PEG (NY)2.11
PEG (5Y)2.77
EPS Next 2Y7.56%
EPS Next 3Y6.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.43%, AMGN has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 24.26, AMGN pays a better dividend. On top of this AMGN pays more dividend than 98.46% of the companies listed in the same industry.
AMGN's Dividend Yield is a higher than the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
5.2 History
On average, the dividend of AMGN grows each year by 10.43%, which is quite nice.
AMGN has paid a dividend for at least 10 years, which is a reliable track record.
AMGN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.43%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
67.83% of the earnings are spent on dividend by AMGN. This is not a sustainable payout ratio.
AMGN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP67.83%
EPS Next 2Y7.56%
EPS Next 3Y6.87%
AMGEN INC
NASDAQ:AMGN (4/24/2024, 7:00:00 PM)
After market: 275.19 +2.18 (+0.8%)273.01
-0.53 (-0.19%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryBiotechnology
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap146.31B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.64 | ||
| Fwd PE | 13.69 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.11
PEG (5Y)2.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.91% | ||
| ROE | 107.78% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 28.96% | ||
| PM (TTM) | 23.83% | ||
| GM | 70.16% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.14 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.65 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)5.43%
EPS 3Y3.96%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.09%
Revenue growth 3Y3.5%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y