CVS Health Provides 2015 Guidance, Dividend Hike And New Share Buyback Program

CVS Health Corp CVS announced on Tuesday 2015 guidance along with a 27 percent dividend increase and a new $10 billion share repurchase authorization.

"We are winning in the marketplace and driving solid and sustainable growth," said Larry Merlo, president and chief executive officer of CVS Health in a press release. "We foresaw the changes ahead in the health care landscape and we built a suite of assets that will enable us to continue to capitalize on the opportunities created. Only CVS Health has an integrated enterprise model that brings differentiated, channel-agnostic solutions to the marketplace that our competitors simply cannot match. Our deep clinical expertise and insights across the enterprise enable us to deliver superior outcomes at a lower cost."

CVS expects to deliver adjusted earnings per share from continuing operations of $5.05 to $5.19 in 2015, representing an increase of 12.5 percent to 15.75 percent from a year ago. The company expects its GAAP diluted earnings per share from continued operations to be $4.77 to $4.91.

CVS also expects to generate free cash flow of $5.9 billion to $6.2 billion in the new year while cash from operations is expected to be $7.6 billion to $7.9 billion.

CVS also announced its Board of Directors approved a 27 percent increase in quarterly cash dividend, to $0.35 per share, or $1.40 per share on an annual basis. The company reaffirmed its commitment to achieve its 2018 dividend payout ratio target of 35 percent.

Finally, CVS announced its Board of Directors also approved a new share repurchase program for up to $10 billion of its outstanding common stock. The company expects its current $6 billion share repurchase program to complete in 2015.