Updated 3/5/25
Agilent Technologies (NYSE: A) is a well-established player in the analytical instrumentation industry, serving customers in life sciences, diagnostics, and applied chemical markets. Since spinning off from Hewlett-Packard in 1999, the company has built a reputation for innovation, quality, and financial discipline.
While Agilent isn’t widely known as a high-yield dividend stock, it has quietly delivered steady dividend growth, making it an appealing option for investors focused on long-term income potential. Its strong balance sheet, consistent cash flow, and responsible capital allocation make it a reliable choice for those seeking dividend stability.
Key Dividend Metrics
💰 Dividend Yield: 0.81%
📆 Next Dividend Payment: April 23, 2025
💵 Annual Dividend: $0.99 per share
🔄 5-Year Average Yield: 0.65%
⚖️ Payout Ratio: 21.93%
📈 5-Year Dividend Growth Rate: ~9.4%
🛡️ Dividend Safety: High
📉 Ex-Dividend Date: April 1, 2025
Dividend Overview
Agilent offers a modest but growing dividend, currently yielding 0.81%. While this yield isn’t particularly high, the company has consistently increased its payouts over the years. Investors looking for stable dividend growth rather than high current income may find Agilent appealing.
The company’s payout ratio of just under 22% suggests that dividends are well covered by earnings and have plenty of room to grow. Over the past five years, Agilent has steadily raised its dividend at a compound annual growth rate of nearly 10%, signaling a strong commitment to returning value to shareholders.
Dividend Growth and Safety
Agilent has built a solid track record when it comes to dividend growth. The company initiated its dividend in 2012 and has increased it every year since, demonstrating a commitment to rewarding shareholders.
A low payout ratio means Agilent isn’t stretching itself thin to pay dividends, making future increases highly likely. The company’s strong free cash flow generation, which reached $1.09 billion over the past year, further supports its ability to maintain and grow its payouts.
The business operates with strong margins and consistent earnings, further reinforcing the safety of its dividend. While some companies are forced to cut dividends in challenging times, Agilent’s financial strength provides a cushion against economic downturns.
Chart Analysis
Agilent Technologies (A) has been in a clear downtrend over the past few months, with the price declining significantly from its recent highs. The stock is currently trading below both its 50-day moving average (orange line) and its 200-day moving average (blue line), indicating a bearish momentum.
Looking at the price action, the stock recently hit a low near $122.29, showing signs of stabilization as it closed slightly higher at $126.00 on March 5, 2025. However, the broader trend suggests that sellers are still in control, with the moving averages acting as resistance levels.
The 50-day moving average has turned downward, crossing below the 200-day moving average in what is commonly referred to as a death cross. This technical signal often points to continued weakness ahead unless a strong reversal occurs.
Volume analysis shows increased selling pressure in recent sessions, particularly during the sharp drop in February and early March. The spikes in red volume bars indicate strong distribution phases, which align with the overall downtrend.
The Relative Strength Index (RSI) at the bottom of the chart shows that the stock has been trading in oversold territory for a while, but it is now attempting to recover slightly. An RSI below 30 suggests extreme weakness, but the recent slight uptick could indicate the potential for a short-term bounce.
Overall, the stock appears to be in a downward phase, with both moving averages sloping downward, heavy selling pressure, and an RSI that is only beginning to recover from oversold conditions.
Analyst Ratings
📊 Agilent Technologies has recently seen a mix of upgrades and downgrades, reflecting differing perspectives on its future prospects. The consensus price target among analysts sits around $146.15, suggesting some potential upside from current levels.
🔼 Upgrades:
📈 Barclays upgraded Agilent from Underweight ➡️ Equal-Weight on February 10, raising the price target from $135 to $145. The analyst cited an improving market position and steady revenue growth expectations in key business segments.
🚀 Baird also adjusted its outlook on January 27, maintaining an Outperform rating while lifting the price target from $148 to $161. This upgrade was based on confidence in Agilent’s long-term strategy and strong product pipeline, which analysts believe will support sustained earnings growth.
🔽 Downgrades:
⚠️ Evercore ISI took a more cautious approach on November 26, lowering its price target from $145 to $142 while maintaining an In Line rating. The concern stemmed from potential headwinds in certain end markets, particularly in research and development spending cycles.
📉 Wells Fargo also revised its target downward on November 27, trimming it from $157 to $155. Although the firm kept its Overweight rating, analysts highlighted near-term earnings challenges as a factor limiting growth potential.
These mixed ratings indicate that while some analysts see growth opportunities ahead, others remain cautious due to short-term market conditions and sector-specific challenges.
Earnings Report Summary
Agilent Technologies just released its latest earnings report, and the numbers show a steady performance with some mixed results. The company brought in $1.68 billion in revenue, which is a slight 1.4% increase from the same time last year. While not a huge jump, it does indicate that Agilent is holding its ground despite some economic challenges.
On the earnings side, net income came in at $318 million, with earnings per share (EPS) at $1.11 under generally accepted accounting principles (GAAP). This is down about 6% compared to last year, when EPS was $1.18. However, when adjusting for non-GAAP measures, which exclude certain one-time expenses, EPS landed at $1.31, showing a small 2% increase from the prior year. That suggests that Agilent’s core business remains strong even though there were some headwinds affecting its bottom line.
Breaking it down by segment, the Life Sciences and Diagnostics Group saw revenue of $647 million, which was up 4% year-over-year. But when adjusting for core business performance, the growth was closer to 1%, meaning external factors contributed to the slight boost. This segment continues to be a solid performer, with a respectable 18.1% operating margin.
The Agilent CrossLab Group, which provides services and consumables, had revenue of $696 million, inching up 1% from last year. On a core basis, it actually grew 3%, showing consistency in its recurring revenue streams. Margins here were particularly strong at 31.8%, reflecting the efficiency of the business.
On the downside, the Applied Markets Group reported $338 million in revenue, which is a 4% drop compared to last year. Even on a core basis, this segment declined 2%, signaling some ongoing struggles. However, it still maintained a 25% operating margin, which helps cushion the impact of lower sales.
Looking ahead, Agilent is forecasting full-year revenue between $6.68 billion and $6.76 billion, aiming for 2.6% to 3.8% growth. When adjusted for currency and other factors, core growth expectations sit between 2.5% and 3.5%, showing the company remains optimistic despite some challenges. Full-year non-GAAP EPS is expected to land within the projected range, keeping investors focused on steady earnings expansion.
Overall, Agilent’s latest earnings paint a picture of resilience. While some segments are seeing headwinds, the company’s strong margins and steady growth outlook suggest it’s still positioned well for the long haul.
Financial Health and Stability
Agilent’s financials paint a picture of a well-run, profitable company. The business generated $6.53 billion in revenue over the past year, with a gross profit of $3.53 billion. Operating margins remain healthy at 23.2%, and net profit margins sit at a strong 19.3%.
The company’s balance sheet is in good shape, with $1.47 billion in cash and a manageable total debt load of $3.54 billion. The debt-to-equity ratio of 58.74% is reasonable, particularly given Agilent’s ability to generate strong free cash flow. A current ratio of 2.2 suggests it has plenty of liquidity to cover short-term obligations.
Valuation and Stock Performance
At a current price of around $125, Agilent has seen some volatility, trading between $121 and $155 over the past year. While the stock has underperformed the S&P 500 recently, this could present an opportunity for long-term investors.
Agilent’s valuation metrics suggest it is trading at a premium, with a price-to-earnings ratio of 28.22 and a forward P/E of 22.08. The price-to-sales ratio of 5.45 and price-to-book of 5.82 also indicate a higher-than-average valuation. However, this premium may be justified given the company’s consistent earnings and strong market position.
Risks and Considerations
While Agilent is a solid company with a strong track record, there are some factors to consider before investing.
One key concern is the stock’s relatively low dividend yield. Investors who prioritize immediate income may find better opportunities elsewhere. Agilent is more of a dividend growth play rather than a high-yield income stock.
Another factor is its valuation. The stock trades at a premium compared to many peers, which could limit near-term upside potential. Investors should consider whether they’re comfortable paying a higher multiple for a company that offers steady but not explosive growth.
Agilent’s business is also influenced by trends in the life sciences, pharma, and chemical testing industries. While these sectors tend to be stable, they can be impacted by fluctuations in research and development spending, regulatory changes, and shifts in global demand.
Final Thoughts
Agilent Technologies stands out as a dividend growth stock rather than a high-yield income play. With a low payout ratio, strong cash flow, and a commitment to consistent dividend increases, it offers a reliable option for investors looking to grow their income over time.
While the stock trades at a premium, its long-term financial strength and market leadership make it a compelling option for those with a patient, growth-focused approach. Investors who prioritize steady, increasing dividends rather than high initial yields may find Agilent to be a worthy addition to their portfolios.
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