There are several areas: areas that are known for their dividends. Utility և real estate investment credentials definitely come to mind. But also the pharmaceutical industry. Large pharmaceutical companies have long been the favorites of income investors.
We asked three Motley Fool participants to choose prescription stocks with juicy dividends to buy. That’s why they chose AbbVie: (NYSE: ABBV), Johnson & Johnson: (NYSE: JNJ), և: Pfizer: (NYSE: PFE).
Everything you would like in equity stocks
Kate Speights (AbbVie): What do investors want in equity stocks? It is obvious that the attractive return on dividends is close to the top of the list. The ability to maintain dividends is a must. A strong increase in dividends is possible. Growth would be unlikely to և have sustainable growth prospects ամ a reasonable estimate. AbbVie checks all of these boxes.
The dividend yield of a large pharmaceutical company is currently almost 4.4%. AbbVie should have no problem financing its dividend plan. Over the past 12 months, it has generated a whopping $ 18.2 billion in free cash flow. As of June 30, the company reported $ 8.6 billion in cash, cash equivalents and short-term investments.
There are not many pharmaceutical companies that have better dividend rates than AbbVie. The company is a dividend aristocrat with 49 consecutive dividends per year.
As for growth prospects. First, AbbVie continues to grow steadily. In the second quarter of 2021, the company’s revenue increased by 19.3% year on year. Overall sales of Humira, the best-selling drug, have grown despite biodiversity competition in international markets. Several products taken by AbbVie through the acquisition of Allergan also contribute to growth.
Ed is right, AbbVie expects its total revenue to decline by 2023. when Humira bioemulators enter the US market. However, this should only be a temporary issue. The company believes it will return to growth in 2024 with steady growth throughout the decade.
This optimism stems from AbbVie’s confidence in its product range. In particular, the company prescribes blood cancer drugs Imbruvica և Venclexta և newer autoimmune diseases drugs Rinvoq և Skyrizi.
Aside from a large dividend plan and strong growth prospects, AbbVie’s rating remains attractive. The shares are currently being sold only 9.6 times the expected profit.
A solid dividend with a strong balance
Prosper Junior Bakiny (Johnson & Johnson). Income-based investors tend to look for financial opportunities to increase dividends, to generate stable returns, with prospects for revenue growth, and to survive even the most severe financial downturns. Johnson & Johnson displays all three specifications.
First, the healthcare giant is the king of dividends, which has increased its payments for 59 years in a row. Second, Johnson & Johnson boasts a variety of businesses, including its pharmaceutical and medical equipment և consumer health sectors. As part of its pharmaceutical division, the company develops drugs on ferries in a variety of fields, including oncology, immunology, infectious diseases, and neuroscience.
Johnson & Johnson launches 28 products or platforms that sell more than $ 1 billion annually. Meanwhile, the company has a rich pipeline of late stages. Johnson & Johnson can continue to increase its revenue from the pharmacy unit by expanding brand new drugs or existing labels. During the second quarter, the company received five regulatory approvals.
Johnson & Johnson products in the consumer sector use strong brands (think Neutrogena, Tylenol, Benadryl, Listerine, etc.). His medical equipment business also looks set to have a bright future, given that this entire industry will continue to grow.
Third, Johnson & Johnson has a Standard & Poor’s credit rating of AAA, which is the highest possible rating է a sign of the company’s financial strength. The pharmacist is unlikely to run into financial problems, reduce his dividends even in the face of a severe downturn. Indeed, Johnson & Johnson announced a 6.3% increase in dividends in April 2020, as the COVID-19 epidemic was already wreaking havoc.
In its more than 100 years in business, this healthcare giant has survived more than a few economic downturns. The current yield of Johnson & Johnson – 2.3%, exceeds it S&P 500:Yield: 1.3%. The company’s 47.7% ratio of conservative cash payments means that it has more than enough space to maintain a steady increase in dividends.
These facts give a clear picture. Johnson & Johnson is a great stock for dividend investors.
Dividend on COVID-19 best-selling vaccine
Zhiyuan Sun (Pfizer): Not only does Pfizer have an amazing pipeline, a solid drug market franchise, the fantastic COVID-19 vaccine, but it also pays a steady dividend of 3.1%. The company can more than keep the shareholder interest rate at a 65% payout ratio.
Pfizer could very well increase its stake thanks to the success of its COVID-19 vaccine, Comirnaty, which recently received the full approval of the US Food and Drug Administration. The company has shipped more than 1 billion doses of Comirnaty since December 2020.
In the second quarter of 2021, Pfizer revenue grew by a staggering 92% year-on-year to nearly $ 19 billion. At the same time, its earnings per share increased by 73% to $ 1.07. Due to high demand for vaccines, Pfizer increased its year-over-year guide to $ 79 billion in revenue, $ 4 to EPS, $ 71.5 billion in sales, and $ 3.60 to EPS, as reported in previous revenue streams.
Without the coronavirus vaccine, revenue from the company’s core business, which includes oncology, internal medicine, hospital products, inflammation, immunology, and rare diseases, has grown by 10% year-on-year. You can count on Pfizer to continue the innovative path, as the company plans to invest more than $ 10 billion this year in research և development. Pfizer announces $ 2.3 billion acquisition of Canadian biotechnology on August 23 Trillium therapeutic agents. The deal provides Pfizer with two leading immune checkpoint inhibitors for the treatment of hematologic malignancies.
Overall, Pfizer shares are still very cheap, with 12.2 times the previous profit. In addition, the company has a plan to repurchase shares, for the purchase of which more than $ 5.3 billion is left, so there is room for capital increase. This is a hot dividend that you do not want to miss.
This article presents the opinion of a writer who may disagree with the position of the “official” offer of Motley Fool Premium Consulting. We are motley! Investigating an investment thesis, even our own, helps all of us think critically about investing, making decisions that will help us become smarter, happier, and richer.