Healthcare Business

5 Big Dividend Biotech and Pharmaceutical Stocks Have Strong Upside Potential

Merck

This remains a leading health care stock 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.

Shareholders receive a 2.95% dividend. SVB Leerink has a Wall Street high $105 target price. The consensus target for Merck stock is $94.33, and shares ended Friday at $88.05.

Takeda

This top Japanese pharmaceutical company is somewhat off the radar but pays an outstanding dividend, and its stock may have the biggest upside potential. Takeda Pharmaceutical Co. Ltd. (NYSE: TAK) engages in the research, development, manufacturing, marketing and out-licensing of pharmaceutical products worldwide.

It offers pharmaceutical products in the areas of gastroenterology, oncology, neuroscience and rare diseases (such as rare metabolic and hematological and hereditary angioedema), as well as plasma-derived therapies and vaccines. Takeda provides its products under the Entyvio, Gattex/Revestive, Alofisel, Natpara, Adynovate/Adynovi, Takhzyro, Elaprase, Vpriv, Gammagard Liquid/Kiovig, Hyqvia, Cuvitru, Albumin/Flexbumin, Ninlaro and Alunbrig brands.

Investors receive a 5.97% dividend. Jefferies upgraded the stock to Buy last week and has a ¥4,000 (about US$35.10) price target. The consensus target is $20.37, and Takeda Pharmaceutical closed on Friday at $14.02 a share.


One very good reason for investors to consider these top companies is that, in a market that is massively overbought, something has to give. Maybe not today or tomorrow, but all signs are flashing yellow, and soon that red light will come up. While not impervious to being sold, these are classic defensive names that will hold up much better than crowded momentum stocks.

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