This Dividend Could Get a Taste of Its Own Medicine...

The dividend is very affordable, but... [Shield] AN OXFORD CLUB PUBLICATION [Wealthy Retirement]( [View in browser]( SPONSORED [Stewart Was a Welder in the Family Business... Then He Did ONE Thing... and Ended Up One of the 1,000 Richest People in the World]( [Forbes Profile]( [See the Remarkable Step Stewart Took](... and How Any American Can Follow the Same Path. [SAFETY NET]( [Can Royalties Continue to Fund This Dividend?]( [Marc Lichtenfeld, Chief Income Strategist, The Oxford Club]( [Marc Lichtenfeld]( You're no doubt familiar with the concept of royalties - recurring payments that people receive for the continued use of their work. I have a friend who had a few lines in a TV show years ago, and he still gets a check for something like $2.12 every so often when the show airs in Sweden. Of course, successful authors, musicians and actors often receive substantial amounts of money in royalties. David Bowie famously sold the rights to his royalties for $55 million in 1997. But it's not just art and media that generate royalties. Drug sales often do, too. It is very common for a drug company to develop a new medicine and then sell the rights to it to a larger company in exchange for an upfront sum of money and future royalties. That way, the company that created the drug no longer carries any risk that it could fail in clinical trials or that the sales team may not be able to convince doctors to prescribe it. Royalty Pharma (Nasdaq: RPRX) buys royalty rights from drug companies. It does not develop new drugs; it simply pays for the rights to collect royalties in the future. Its royalty stream includes some well-known drugs like... - Spinraza for spinal muscular atrophy - Tremfya for plaque psoriasis and arthritis - Imbruvica for blood cancers. This kind of business generates a ton of cash flow because it doesn't have many expenses. SPONSORED [The Ultimate Passive Income Investment]( [Relaxing with Passive Income]( It's not a stock, bond or private company... But this little-known alternative investment could hand you BIG MONTHLY INCOME. [CLICK HERE TO FIND OUT WHAT IT IS]( Royalty Pharma just announced a 5% dividend increase, its fourth raise in a row. It has boosted the dividend every year since it began paying one in 2020. The new $0.21 per share quarterly dividend gives the stock a 3% yield. Can investors continue to rely on the dividend the way my buddy relies on those Swedish royalty checks? In 2023, Royalty Pharma is forecast to have generated $2.6 billion in free cash flow, up from $2.1 billion in 2022. The company reports full-year earnings on February 15. This year, however, free cash flow is projected to drop to $2.2 billion, which is not what Safety Net wants to see. The model penalizes companies for decreases in free cash flow. [Chart: ]( [View larger image]( That being said, Royalty Pharma's payout ratio is quite low. The company is expected to have paid out just 15% of its free cash flow in dividends in 2023, and that figure should increase only slightly to 18% this year. I like to see payout ratios of 75% or lower, so Royalty Pharma clearly generates plenty of cash to pay its dividend. As usual, before I reveal my grade, I want to hear from you. Which is more important to you - the low payout ratio or the potential drop in free cash flow? What grade would you give Royalty Pharma's dividend? Click below to leave a comment, then scroll up to finish reading and view my grade. [Share Your Grade Here]( [The Oxford Club's Wealth, Wine and Wander Tour of Spain - Barcelona, Granada, Seville and Madrid, June 6-16, 2024 (plus special extension through June 21)]( BUILD AND PROTECT YOUR WEALTH [Discover the $12 Energy Company Paying a Nearly DOUBLE-DIGIT Yield That Just STUNNED Investors With Plans to Increase It Much Higher]( [The No. 1 Question You Should Ask Yourself Every Day]( [The Man Who Called the Market Bottoms in '02, '09 and '20 Makes Shocking Prediction. Click Here to Find Out What It Is.]( [Rinse and Repeat on These Bullish Setups]( MORE FROM WEALTHY RETIREMENT [Article]( [Is This the Only Cheap Tech Stock?]( [Article]( [Is Sturm, Ruger & Co. Staring Down the Barrel of a Dividend Cut?]( [Article]( [A Perfect Storm for Oil Prices]( [Article]( [Patience Pays Off in AI Investing]( [Facebook]( [Facebook]( [LinkedIn logo]( [LinkedIn]( [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0ADoes this company bring in enough cash to fend off a dividend cut?%0D%0A%0D [Email Share](mailto:?subject=A%20great%20piece%20from%20Wealthy%20Retirement...&body=From%20Wealthy%20Retirement:%0D%0A%0D%0ADoes this company bring in enough cash to fend off a dividend cut?%0D%0A%0D [Push Alert]( [Push Alert]( SPONSORED [Five Dividend Stocks to Buy Now (FREE INSIDE)]( Marc Lichtenfeld - income expert and author of Get Rich with Dividends - is giving away his Ultimate Dividend Package... Completely free of charge! Seriously, no credit card required. Inside, you'll get the names and ticker symbols of his TOP FIVE dividend stocks right now, including... - An "A"-rated, ultra-safe dividend stock with a huge 8% yield - Three of Marc's favorite "Extreme Dividend" stocks, which could supercharge your income - And finally, his No. 1 dividend stock for a LIFETIME of income. [Click here before the download link expires.]( [The Oxford Club]( You are receiving this email because you subscribed to Wealthy Retirement. Wealthy Retirement is published by The Oxford Club. Questions? Check out our [FAQs](. Trying to reach us? [Contact us here.]( Please do not reply to this email as it goes to an unmonitored inbox. [Privacy Policy]( | [Whitelist Wealthy Retirement]( | [Unsubscribe]( © 2024 The Oxford Club, LLC All Rights Reserved The Oxford Club | [105 West Monument Street](#) | [Baltimore, MD 21201](#) North America: [877.808.9795](#) | International: [+1.443.353.4621](#) [Oxfordclub.com]( Nothing published by The Oxford Club should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed personalized investment advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after publication before trading on a recommendation. Any investments recommended by The Oxford Club should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of The Oxford Club, LLC, 105 West Monument Street, Baltimore, MD 21201.