Updated 3/13/25
ResMed isn’t typically the first name that pops up when talking about dividend stocks. But beneath the surface of this high-tech healthcare player is a quietly growing income stream that appeals to long-term, dividend-focused investors. Based in San Diego, ResMed is a major force in digital health and sleep-related medical devices, serving people who deal with sleep apnea, COPD, and other chronic conditions.
What makes ResMed interesting is how it blends traditional medical hardware with a growing cloud-based software business. This gives the company a steady stream of recurring revenue alongside its product sales. For dividend investors looking for consistency, durability, and growth potential—not just high yield—it’s a name worth paying attention to.
Recent Events
ResMed has had a solid stretch recently. Over the last twelve months, revenue climbed to just under $5 billion, with a healthy year-over-year growth of 10 percent. The bottom line has been even more impressive. Quarterly earnings jumped 65 percent compared to the same period last year. That kind of strength on both the top and bottom line shows a business firing on all cylinders.
Part of this performance is driven by long-term trends like greater awareness around sleep health and the needs of an aging population. But it’s also due to the company continuing to build out its software services—things like the Brightree platform—which bring in subscription-style revenue and add stability to the business.
One interesting piece of market data is the short interest, which recently edged up to around 7 percent of the float. It doesn’t set off alarms, but it’s a sign that some traders are betting against the stock in the near term, even while the underlying business keeps delivering strong numbers.
Key Dividend Metrics
📈 Forward Dividend Yield: 0.95%
💰 Annual Dividend: $2.12 per share
📉 Trailing Yield: 0.92%
🔄 5-Year Average Yield: 0.83%
📊 Payout Ratio: 23.85%
🗓️ Last Dividend Paid: March 20, 2025
⚠️ Ex-Dividend Date: February 13, 2025
Dividend Overview
ResMed doesn’t pay a high dividend, but it pays a smart one. The yield sits just below 1 percent, which won’t attract income hunters looking for high payouts. But for investors focused on stable, growing dividends backed by strong fundamentals, it’s a different story.
The company currently pays out $2.12 per share annually, and with a payout ratio under 24 percent, it’s only using a small slice of its earnings to do so. That gives ResMed the flexibility to invest in its business while also continuing to reward shareholders. This kind of balance is often what separates dependable dividend stocks from ones that are just stretching to keep yields high.
Dividend Growth and Safety
One of the more encouraging signs for dividend investors is that ResMed’s payout has quietly been growing over time. It doesn’t get a lot of attention in the headlines, but the steady upward trend speaks volumes. When you see a forward yield that’s actually higher than the five-year average, it’s usually a signal that the company is committed to gradually raising its dividend.
And when it comes to safety, ResMed is in excellent shape. Free cash flow over the last twelve months reached $1.1 billion, giving it more than enough cushion to cover dividends. Liquidity is strong, too—the current ratio is above 3, showing that short-term obligations are well covered. Debt isn’t a concern either, with the debt-to-equity ratio sitting under 16 percent. Altogether, this paints a picture of a company with a sturdy financial base and a dividend that’s not just sustainable, but poised to grow.
Chart Analysis
Current Market Phase
Looking at ResMed’s chart, the price action appears to be transitioning out of a distribution phase and potentially into early markdown. For several months, the stock traded in a broad, choppy range with multiple lower highs and lower lows, which is characteristic of distribution. This period followed a strong markup from late spring through mid-fall, where the price steadily climbed with volume spikes on upward days—classic signs of institutional participation during the markup stage.
More recently, the price has begun trending below the 50-day moving average, and just in the past few sessions, it broke under the 200-day moving average as well. The 50-day MA is now sloping downward and crossing below the 200-day MA, which forms what many technicians refer to as a bearish crossover or “death cross.” This type of movement typically signals a shift in market sentiment.
Volume Behavior
Volume throughout the distribution range has been uneven. Noticeable spikes appeared on some of the down days, especially in November and again in February, pointing to increased selling pressure. These red-volume bars often came without much follow-through on rebounds, suggesting buyers weren’t stepping in with strength. In the last two months, the volume has remained moderate but with a slight bias toward red days, reinforcing the weakness.
What stands out is the lack of high-volume demand near support zones. That’s often a warning sign that buyers aren’t ready to defend price levels yet. Even as the price hovered around the 225–230 zone, which previously acted as support, the volume didn’t confirm accumulation.
RSI and Momentum Shift
The relative strength index (RSI) has been drifting lower since peaking in late 2024. It now sits below the midpoint line near 40, which reflects weakening momentum. There hasn’t been a strong bullish divergence to suggest a reversal is forming. Instead, the RSI has been hugging the lower range, consistent with a market that’s losing steam.
Price Action and Candle Structure
Over the past five sessions, the candles have revealed a subtle but telling story. There have been longer upper wicks, suggesting sellers are taking control on intraday strength. The most recent candle closed near the low of the day, rejecting the 50-day moving average from below—another sign that overhead resistance is building.
This price action, combined with the failed attempt to reclaim the 50-day MA, leans toward bearish pressure gaining traction. Each of the past five days has had trouble holding gains, with very little evidence of strong buying pressure.
Moving Average Context
The long-term 200-day moving average is still slightly rising, but the price now sits just below it, and the short-term 50-day has already started to curve down. This narrowing gap and potential downward crossover are important technical signals. It implies that the medium-term trend is weakening while short-term momentum has already shifted lower.
It’s also worth noting how many times the stock has tested the 200-day average since early February. Repeated tests of support without a firm bounce often foreshadow a breakdown, and it looks like that breakdown may have just happened with the most recent candle.
Analyst Ratings
📈 ResMed Inc. has recently seen varied assessments from financial analysts, reflecting differing perspectives on its future performance. In early March 2025, Citigroup adjusted its stance on ResMed, moving from a neutral position to a buy rating. This upgrade was influenced by the company’s consistent earnings growth and its strategic initiatives aimed at expanding its market presence. Citigroup’s analysts pointed to ResMed’s continued innovation in digital health and its growing dominance in sleep apnea treatment as key reasons for the shift in outlook.
📉 On the flip side, back in September 2024, Wolfe Research downgraded ResMed with a price target of $180. The downgrade stemmed from growing concerns about intensifying competition in the sleep-disordered breathing space and the possibility of downward pressure on product pricing. Wolfe’s team expressed caution over ResMed’s ability to protect its market share and margins in an increasingly competitive landscape.
📊 Currently, the consensus among 18 covering analysts leans positive, with an overall rating of outperform. The average price target sits around $269.38, implying a potential upside of roughly 20 percent from the current levels. Among those analysts, the range of price targets stretches from a conservative $195.00 to a more optimistic $295.00. That spread illustrates the contrasting views in the market about how much room ResMed has to grow in the short-to-medium term.
🎯 Overall, analysts appear to be weighing ResMed’s steady fundamentals and innovation pipeline against broader industry risks and evolving competitive dynamics.
Earning Report Summary
ResMed’s latest earnings report for the second quarter of fiscal 2025 was solid across the board, showing both healthy growth and strong execution. Revenue came in at $1.28 billion, which marked a 10 percent jump from the same quarter last year. A big chunk of that growth came from the U.S. market, especially in their masks and device business lines, where demand continues to stay strong.
Net income hit $345 million, translating to $2.34 per share. On an adjusted basis, earnings were even better at $2.43 per share, reflecting a 29 percent gain compared to the year before. That kind of earnings growth is impressive and points to more than just strong sales—it shows ResMed is running a tighter, more efficient operation overall.
Margins were another bright spot. The gross margin for the quarter improved to 58.6 percent, up more than four full points from a year ago. On the adjusted side, gross margin came in at 59.2 percent. That improvement speaks to good cost control and a favorable mix of higher-margin products.
Operating income also climbed noticeably, with GAAP numbers up 34 percent and adjusted figures rising 27 percent. That shows ResMed isn’t just growing the top line—they’re expanding profitability too.
Cash flow continues to be a strength. The company generated $309 million in operating cash flow during the quarter. That kind of cash generation gives them a lot of flexibility, whether it’s for investing back into the business, pursuing acquisitions, or continuing to return capital to shareholders through dividends.
Overall, this was a strong quarter that highlighted both the resilience and efficiency of ResMed’s business. They’re executing well, riding strong demand, and keeping margins healthy—all while staying financially disciplined. It’s the kind of report that quietly reinforces confidence in the company’s long-term outlook.
Financial Health and Stability
ResMed stands out in the healthcare space because of how efficiently it runs its business. Gross margins are close to 59 percent and operating margins are even more impressive at over 32 percent. These aren’t just one-time figures—they’ve been consistent over the years, a sign of a well-managed, high-return business.
The company’s return on equity is sitting just above 25 percent, while return on assets is close to 14 percent. Those are strong numbers and show how effectively ResMed turns its investments into profit. The balance sheet supports this too. With over $520 million in cash and less than $840 million in debt, there’s plenty of room for both safety and opportunity.
Cash flow is a highlight here. With nearly $1.5 billion in operating cash flow and over $1.1 billion in levered free cash flow, ResMed has ample financial firepower. Whether the goal is paying dividends, making acquisitions, or investing in R&D, the company has flexibility without stretching itself thin.
Valuation and Stock Performance
At just over $223 per share, ResMed trades well below its 52-week high of $263 but comfortably above the lows near $172. The stock has gained about 15 percent over the past year, which edges out the S&P 500’s performance during the same time.
Looking at valuation, ResMed isn’t what you’d call a bargain stock—but quality rarely comes cheap. The forward price-to-earnings ratio is just under 22, and the PEG ratio sits at 1.45, which tells us investors are still paying a fair multiple for future growth. Price-to-sales and price-to-book stand at 6.67 and 6.23, respectively—both on the higher side, but again, reflective of a high-margin, high-return business.
The short interest ratio is a bit elevated, around 8 days to cover, which means there’s some skepticism baked into the current price. That could lead to more volatility in the short term, but doesn’t detract from the company’s long-term fundamentals.
Risks and Considerations
While there’s a lot to like about ResMed, especially from a dividend perspective, it’s important to keep expectations grounded. The yield is relatively low, so this stock isn’t going to fill the role of a pure income generator. It’s more suited for investors who want a combination of dividend growth and capital appreciation.
There’s also always a level of risk that comes with operating in a competitive industry. ResMed has a strong market position, but medical devices is a space where pricing pressure and innovation cycles can move quickly. Any disruptions in product development or regulatory shifts could impact margins.
And lastly, the uptick in short interest, while not overly concerning, is worth keeping an eye on. It suggests that some market participants see potential headwinds ahead—perhaps in valuation, competition, or simply profit-taking after a good run.
Final Thoughts
ResMed might not be the flashiest dividend stock out there, but it’s one that delivers where it counts. Its yield is modest, but it’s supported by a business that’s consistently profitable, cash-rich, and well-positioned for future growth. That kind of foundation makes a dividend not just sustainable, but capable of growing quietly over time.
What makes ResMed appealing is the way it combines a strong balance sheet, expanding software revenue, and disciplined management. It’s not a stock that screams for attention, but for investors who value consistency and long-term financial health, that can be a real strength.
In an environment where many dividend stocks are stretched or overleveraged, ResMed stands out as one that simply does its job—quietly, efficiently, and with an eye on the future.