Caution: Danger Ahead

The dividend is very affordable, but... ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

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View in browser SPONSORED The Ultimate Passive Income Investment 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 SAFETY NET Can Royalties Continue to Fund This Dividend? Marc Lichtenfeld, Chief Income Strategist, The Oxford Club 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 See What One Ticker... One Trade... EVERY WEEK... Can Do for YOU New research proves that trading one ticker every week has had the ability to produce extraordinary gains... Including a rare 2,614% in under 11 days. See this groundbreaking new discovery for yourself. SHOW ME ONE TICKER PAYOUTS 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. 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 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 Have Your Stocks Taken a Beating? See the (Secret) Signal That Separates Big Winners From Painful Losers. Watch the Full Presentation. Rinse and Repeat on These Bullish Setups MORE FROM WEALTHY RETIREMENT Is This the Only Cheap Tech Stock? Is Sturm, Ruger & Co. Staring Down the Barrel of a Dividend Cut? A Perfect Storm for Oil Prices Patience Pays Off in AI Investing Facebook LinkedIn Email Share Push Alert SPONSORED The Commodities Supercycle Summit Financial expert Marc Lichtenfeld called the 2022 boom in oil stocks... and now he's making an even bigger call in the commodities market. Join him and Buddy Pittman at the Commodities Supercycle Summit to discover why he believes a $1 investment has the potential to generate 1,000% returns over the coming years. Click here now to learn more. 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. 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