Healthcare has not always been the most fruitful hunting ground for dividend-growth investors. While there are numerous high-quality companies that generate substantial cash flow, many healthcare companies prefer to hang onto their cash for R&D or M&A purposes, or "return" it to shareholders in the form of share buybacks. That said, there are some worthwhile opportunities that dividend-growth investors should seriously consider.
Drugs - The Old Standby
Within healthcare, pharmaceutical companies have always been dependable dividend-payers and that is still true today. Novartis (NYSE:NVS), AstraZeneca (NYSE:AZN), GlaxoSmithKline (NYSE:GSK) and Pfizer (NYSE:PFE) are just four prominent examples of above-average dividend yields available in this sector. Novartis is arguably the most attractive today, but AstraZeneca could appeal to those who really look to couple capital growth and dividends, as the market may have overestimated the company's vulnerability to patent cliffs.
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2 comments:
Stephan,
A couple of favorites of mine in this space, which like Techne are on the supply side of biotechnology, are West Pharmaceuticals (WST) and Sigma-Aldrich (SIAL). Sigma, like Techne, provides quality biologic reagents as well as research & bulk chemicals. West makes components and products for injectable drugs. Both are low yield, low payout ratio companies. I don't currently own either, but they are both always on my radar should a cheaper opportunity present itself.
Funny that you mention those two...
They were literally the +1 and +2 on my list. There's always a limit to how much I can put into one piece (too many tickers and it just turns into a mess), but those would have been the next two in the piece.
Great minds think alike, huh? lol
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