Healthcare Business

Why Dividend-Paying Big Drug Companies May Be the Best Stocks to Own Now

Eli Lilly

This company also has solid upside potential, and it is a great pick for conservative accounts. 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.

In July, Eli Lilly raised its full-year profit forecast after increased demand for its Trulicity diabetes drug helped it beat second-quarter profit expectations. The company raised its 2020 adjusted earnings forecast to between $7.20 and $7.40 per share, from its prior range of $6.70 to $6.90 per share.

Shareholders receive a 1.98% dividend. The $186 Goldman Sachs price objective is well above the $165.07 consensus target price. Eli Lilly stock was last seen trading at $149.26.

Merck

This remains a leading health care stock pick for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.

The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.

Merck purposely was cautious during the start of the pandemic when it came to vaccine development, but it is now slowly but surely ramping up its efforts into the clinic. The company, which has good form in creating a new vaccine against a sweeping threat after gaining approval for its Ebola vaccine, said in its second-quarter update that via its recent buyout of Themis, it is plotting a third-quarter start for human testing of its preclinical V591.

Merck shareholders receive a 2.85% dividend. Goldman Sachs recently upgraded it to Buy and raised the price target to $105. The consensus price target is $95.00, and Merck stock closed at $85.54 per share.

Pfizer

This top pharmaceutical stock made a gigantic splash in 2016 with a $5.5 billion purchase of Anacor Pharmaceuticals. Pfizer Inc. (NYSE: PFE) is a global biopharmaceutical company with a diversified portfolio of products and pipeline candidates, and it is one of the largest pharmaceutical companies in the world as measured by market capitalization and revenue.

The company’s commercial operations are bifurcated into two business segments: Innovative Health, which focuses on the development and commercialization of medicines and vaccines, as well as consumer health care products, in various therapeutic areas, and Essential Health, which offers branded generic products, biosimilars, anti-infectives and other products without marketing patent protection.

Pfizer’s vaccine based on cutting-edge RNA gene technology showed promising potency against the new coronavirus in an early trial, scientists report. The new vaccine, which for now is just called BNT162b1, elicited a robust immune response in participants, which increased with dose level and with a second dose, according to a news release from the journal Nature, which published the trial data earlier this month.

Investors receive a 4.00% dividend. RBC has a $43 the price objective. The consensus target is at $41.85. The shares closed most recently at $38.05.

These five mega-cap pharmaceutical giants have come way in from their 52-week trading highs and are offering investors outstanding entry points. With very solid and dependable dividends, all five are good additions to growth portfolios looking for steady income streams.