At time of writing, the share price of Cochlear Ltd [ASX:COH] is up 6.51% to $205.24.
The COH share price fell nearly 40% during the onset of COVID-19, then bounced back up and was trading largely sideways prior to today’s jump:
Let’s look at the latest news coming out of Cochlear, which triggered today’s spike.
Cochlear share price reacts to FDA approval for four new products
With an announcement released prior to the ASX opening, the COH share price jumped when trading got underway.
The announcement related to the following products, which have received FDA approval:
- Nucleus® Kanso® 2 Sound Processor
- Nucleus® 7 Sound Processor for Nucleus 22 implant recipients
- Custom Sound® Pro fitting software
- Nucleus® SmartNav system
What to make of the recent sideways trading in COH shares
Cochlear is one of the biggest ASX growth stories of the last five years and the share price has taken off in earnest since 2012.
Given that implant sales slumped 80% in April, the 40% share price fall to the March low demonstrates a degree of confidence in Cochlear’s future trajectory.
The company opted for an $880 million institutional placement just after the March low, which may have put a floor under the COH share price.
COH is a bit like CSL Ltd [ASX:CSL], just on a smaller market-cap scale. It’s had a massive multiyear run up the charts, followed by a slump and then sideways trading.
Both companies offer small dividend yields at the moment, with the COH dividend yield standing at 1.74%.
Are the two both still growth companies or are they turning into mature businesses, with significant market share and more predictable earnings?
After a while of beating expectations, the expectations lift and even strong numbers can disappoint.
While COVID-19 puts pressure on many dividend stocks, it’s hard to say if this pair of businesses will be able to maintain the payout.
If you are looking for more dividend stock ideas, you can get a great free report by our Editor Greg Canavan, on that exact topic, right here.
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