Healthcare Business

5 Big Dividend Pharmaceutical Stocks to Buy as Health Care Could Explode Higher

Bristol-Myers

This one always remains a solid pharmaceutical stock to own. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

The company reported solid fourth-quarter results last week, and Merrill noted this:

Bristol reported strong 4Q results (though largely ahead of Street given the recognition of Celgene revenue). We highlight the 2020 / 2021 provided guidance as the key focus for investors, as well as +$5 billion increase in share repurchase. While guidance comes in light, we expect the results to be viewed favorably by the Street and look for share strength.

Shareholders receive a 2.72% dividend. The $95 Merrill price target is well above the $72.30 consensus target. Bristol-Myers stock closed most recently at $66.91 per share.

Eli Lilly

This is another drugmaker with solid upside potential. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.

The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.

Eli Lilly fourth-quarter results also came in strong, and the analysts said this:

With a strong close to 2019, Lilly’s industry-leading top- and bottom-line growth appears on track to continue in 2020. 2020 is shaping up to be a big year of clinical and regulatory catalysts across all of Lilly’s core franchises. Discontinuation of pegilodecakin, while a disappointment for Lilly’s oncology franchise, was already removed from our model.

Shareholders receive a 2.02% dividend. Merrill has set a $155 price objective. The consensus target is $139.50, but Eli Lilly stock was last seen trading at $145.51.

Novartis

This is among the world’s largest pharmaceutical drug makers by sales and remains a top international pick across Wall Street. Novartis A.G. (NYSE: NVS) develops, manufactures and markets a range of health care products worldwide.

Novartis operates through three segments: Pharmaceuticals, Alcon and Sandoz. The Pharmaceuticals segment offers patented prescription medicines for oncology, neuroscience, retina, immunology and dermatology, respiratory, cardio-metabolic, established medicines and cell and gene therapies. Key products include Cosentyx (for psoriasis and others), Entresto (heart failure), Lucentis (wet macular degeneration) and Gilenya (multiple sclerosis).

The company posted inline results, and the analysts noted this about the forward guidance:

Novartis guidance was broadly in line with our and consensus expectations. Core operating income is expected to grow high single to low double-digit, and net sales are expected to grow mid to-high single-digits with Pharma mid-to-high single digits and Sandoz low single digits. This excludes Alcon and oral solids being divested to Aurobindo from both 2019 and 2020, and assumes no Gilenya or Sandostatin LAR generics enter in 2020 in the US.

Novartis offers shareholders a 3.17% dividend. The Merrill price target is $103. The consensus target is $102.67, and the shares closed at $97.42 on Monday.

Note that sentiment will swing this year, especially if some of the more far-left candidates look like they are taking a lead. With that in mind, there may be dips that will offer better buying opportunities, so it may make sense to scale buy some shares for a partial position now, especially in front of or right after ex-dividend dates.

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