Health and Healthcare
Top Dividend-Paying Pharmaceutical Stocks Rated Buy by Analysts
Published:
Last Updated:
We are just about to wrap up the first quarter, and we could very well end where we started the year. After a brutal January and February sell-off that took stocks down to correction levels for the second time in seven months, the indexes have fought back to just about even. With the political cycle in full swing, the rhetoric against drug pricing has ratcheted up yet again, as candidates try to push the populist button.
Health care, and especially the pharmaceutical stocks, have been the main whipping boys for the politicians, and the fact of the matter is big pharmaceutical companies are, plain and simple, cheap. We screened our Wall Street research data base for companies that look inexpensive and have big potential upside. We also looked for stocks that are Buy rated.
AbbVie
This is the top global pharmaceutical stock at Jefferies and is also on its Franchise Stock Picks list. AbbVie Inc. (NYSE: ABBV) is a research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.
One of the biggest concerns with AbbVie is what might eventually happen with anti-inflammatory therapy Humira, which generated $14 billion in sales in fiscal 2015. That was the most any drug has recorded during a single year and represents a gigantic part of the company’s overall earnings. The problem with Humira is that biosimilars and generics are itching to enter the market, with Amgen leading the charge, and some Wall Street analysts project that AbbVie may have a difficult time stopping that trend.
Jefferies analysts have become much more positive on the stock and feel that the company’s response to the Coherus Inter Partes Review (IPR) on key Humira patents looks solid and an IPR denial is a very real possibility.
AbbVie reported mixed fourth-quarter numbers but affirmed guidance, and some on Wall Street were concerned over a new hepatitis C drug from a rival company. Jefferies cited the company’s very cheap valuation and strong catalysts this year as reasons for making it the top global pick.
AbbVie investors receive a 4.0% dividend. The Jefferies price target for the stock is $80, among the highest on Wall Street. The Thomson/First Call consensus target is $71.35. Shares closed Tuesday at $57.05.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
