It has become the proverbial broken record. Every time it seems like yields on government securities will start trending higher, they roll over again. There are a variety of reasons, including everything from a spike in COVID-19 due to the Delta variant, which may slow the economy again, to worries over trade issues and an increasingly belligerent China. One thing is for sure. Though the Federal Reserve is hinting at finally slowing quantitative easing, even if yields do reverse, it will take years before they get back to normal levels.
So once again, what are growth and income investors to do? One outstanding sector to look at is pharmaceuticals, especially the big companies that have consistently paid and raised their dividends. We found four stocks that are rated Buy by top Wall Street firms and look like very good ideas for investors, especially now that the market is overbought and the slow seasonal market months are right around the corner.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This is one of the top pharmaceutical stock picks across Wall Street, and 34% of fund managers own the shares. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.
One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.
AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.
Shareholders receive a 4.47% dividend. SVB Leerink has Wall Street’s high price target of $144. The Wall Street consensus target is just $124.08, and AbbVie stock closed trading on Tuesday at $116.25.
This remains a solid pharmaceutical stock to own long term and offers among the best values now for investors. 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.