Gilead Sciences Inc (GILD): fundamental data and analysis; equity, ROE, ROA, DuPont analysis, EPS, P/E ratio, dividends, Excel download

Companies

GILEAD SCIENCES INC (GILD)

Tags: health care, pharmaceuticals

Gilead Sciences, Inc., incorporated in 1987, is a biopharmaceutical company that discovers, develops and commercializes innovative therapeutics. Our mission is to advance the care of patients suffering from life threatening diseases worldwide. We have operations in North America, Europe and Australia. To date, we have focused our efforts on bringing novel therapeutics for the treatment of life threatening diseases to market. We continue to seek to add to our existing portfolio of products through our internal discovery and clinical development programs and through an active product acq... Moreuisition and in-licensing strategy. Less

Key statistics

	Most recent	Growth rate (CAGR)
	Most recent	1 year	5 years	10 years
Book value of equity per share	$6.65	37.8%	29.8%	48.7%
including aggregate dividends		37.8%	29.8%	48.7%
EPS	$1.78	8.4%	15.2%	—
Annual dividends	$0	—	—	—
Share price	$73.99

	Most recent	Median
	Most recent	1 year	5 years	10 years
ROE	31.9%	32.1%	46.6%	41.9%
ROA	13.5%	13%	27.6%	24.9%
P/B ratio	11.13	5.5	5.4	8.2
P/E ratio	41.57	20.0	15.3	21.5

Gilead Sciences Inc (GILD) - Wealth of ongoing shareholders per share

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A company creates wealth for its long-term shareholders in 2 main ways - through dividend payments and through the accumulation of retained earnings. This graph shows the accumulation of per-share equity of long-term shareholders (green bars), which consists of the retained earnings plus all capital invested in the company, and the cumulative dividends the company has paid over time per share of its stock (blue bars).

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Gilead Sciences Inc (GILD) - ROE and ROA - return on equity and return on assets

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In the words of Warren Buffett: "We're looking for... businesses earning good returns on equity while employing little or no debt."

Return on equity is a key metric of financial performance, indicating a company's ability to generate earnings using shareholder capital. Over time, ROE is one of the major determinants of the rate at which a company creates shareholder wealth. The average ROE for large U.S. companies is 12%, and many investors use it as a threshold for attractive investments.

Companies can boost ROE by increasing leverage, which reduces the safety of the investment. Therefore, it is useful to look at the return on assets (ROA), which measures a company's earning power regardless of its capital structure. A widening gap between ROE and ROA may be a warning sign that should be thoroughly investigated.

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Gilead Sciences Inc (GILD) - EPS - earnings per share

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Earnings per share is a popular metric used to value a company (using P/E ratio); growth in EPS is often used to judge company growth potential. However, many investors believe that EPS is an inferior metric to ROE, because it ignores the amount of capital the company used to generate earnings.

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Gilead Sciences Inc (GILD) - Equity and intangible assets

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Balance sheets of many companies contain intangible assets such as goodwill, trademarks, patents, etc. Many investors consider intangibles more difficult to value than physical assets. If intangible assets had been valued incorrectly, they must be impaired, resulting in a loss charged against shareholder equity. This chart demonstrates the potential loss to shareholder equity from such impairments.

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Gilead Sciences Inc (GILD) - Long-term debt to equity ratio

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Companies often use debt financing to increase their return on equity. However, as the amount of debt financing increases relative to the amount of equity financing, the company becomes more sensitive to down turns and other negative events. As a result, many investors use the ratio of debt to equity as a measure of a company's financial risk, and avoid companies that have this ratio above 1.

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Gilead Sciences Inc (GILD) - Equity to assets ratio

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This chart shows shareholder equity as a percentage of total assets, allowing investors to judge the overall leverage. Companies with a higher proportion of equity can be viewed as safer investments. This metric is particularly important for highly leveraged institutions, such as banks, where it must be at least 4% according to government regulations.

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Gilead Sciences Inc (GILD) - Common stock dilution

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This chart shows the cumulative dilution of investor ownership in a company over time. Dilution reduces an investor's participation in the future earnings. Dilution increases when a company issues new shares, and decreases when a company buys its shares back. Many investors avoid companies with large chronic dilution.

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Gilead Sciences Inc (GILD) - DuPont analysis

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DuPont analysis provides insight into factors affecting the Return On Equity of a company. The DuPont equation decomposes ROE as follows:

ROE = (Net margin) * (Asset turnover) * (Asset to equity ratio)

Net margin indicates operating efficiency, Asset turnover measures the total asset use efficiency, and the Asset to equity ratio is a measure of financial leverage.

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Gilead Sciences Inc (GILD) - Dividend payout ratio

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The dividend payout ratio tells investors what percentage of earnings a company returns to shareholders, and what percentage it retains and reinvests. This ratio represents a major capital allocation decision by the company, and can be used to judge management rationality. Rational management should pay out all earnings that cannot be productively reinvested. Therefore, a low dividend payout ratio for a profitable company with a low growth potential may be a warning sign.

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Gilead Sciences Inc (GILD) - Price to book ratio

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Many investors use the P/B ratio as a quick way of judging company valuation. Value investors - followers of Graham and Dodd - specifically seek out companies with low P/B ratios. However, investors should be careful not to make investment decisions on this metric alone, without considering a company's earning and growth potential, since a low P/B ratio can be a sign of a bleak future for the business.

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Gilead Sciences Inc (GILD) - PE - price to equity ratio

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P/E ratio is a popular way of making a quick judgment of a company valuation. Value investors - followers of Graham and Dodd - often seek solid companies with low P/E ratios as investment opportunities. However, P/E ratio represents an oversimplified approach to business valuation, and can often lead to incorrect investment decisions.

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