Rebounding Cash Flow Gilead's cash flow has shriveled in the past few years. This year's free cash flow will be half of what it was in 2016. SafetyNet Pro does not look kindly on declining cash flow. | SafetyNet Pro is a groundbreaking tool that predicts dividend cuts with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet Pro is reserved exclusively for subscribers of Marc's newsletter, The Oxford Income Letter. | | |
Cash flow is expected to dip lower again this year when the final numbers are tallied but then rebound strongly in 2021. It still won't come close to where it was in 2016, but a meaningful improvement goes a long way. Even with the low cash flow totals of the past few years, the dividend was in okay shape. The payout ratio in 2020 will come in at around 41%, which is well within my comfort zone. Gilead has a short but solid dividend-paying track record and a nice, low payout ratio. The only knock on the stock from a dividend safety standpoint has been falling cash flow. That puts the stock at moderate risk for a dividend cut. But with free cash flow expected to grow in 2021, it is quite likely that Gilead will be upgraded and its dividend will be considered relatively safe. Dividend Safety Rating: C If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments section. Good investing, Marc | 
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