Investing

2 Cheap Pharmaceuticals Highlight Jefferies Franchise Picks Dividend Stocks to Buy

Boeing

This top aerospace industrial is down almost 8% since the beginning of the year. Boeing Co. (NYSE: BA) designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide.

Top Wall Street analysts have increased confidence in continuing good demand, and they note that the company has made announcements in the past that support the thesis that productivity and margins will continue to improve. 787 execution is good as the company works through the backlog, and cash flow looks to be strong with 787 deliveries and C-17 orders. Some Wall Street analysts also point to low oil prices as a bullish indicator for the top carriers who are Boeing’s big customers.

Investors receive a 3.30% dividend. Jefferies has a $165 price target, and the consensus target is $137.95. Shares closed on Tuesday at $132.68.

Pfizer

This is also a top global pharmaceutical pick at Jefferies. Pfizer Inc. (NYSE: PFE) has a very strong pipeline, and being the world’s largest drug manufacturer by sales value supports the Wall Street notion that the company can generate higher long-term revenues through the accelerated growth of its new drugs over the next five years.

The Treasury Department announced new rules for corporate tax inversions, which effectively scuttled Pfizer’s deal with Allergan. With the deal over, not only are the risk arbitrage funds buying the stock back, but some felt there was as much as a $5 weight on the stock. The Jefferies analysts feel that investors can once again focus on the sum-of-the-parts story, which they feel is very compelling.

Pfizer has announced that it is starting 20 clinical trials this year, and more soon after, on treatments to conquer cancer, as it also seeks to gain leadership in one of the hottest and most lucrative areas of medicine. Hedge funds seem to like the stock as a total of 22 own it now.

Pfizer investors receive a 3.65% dividend. The Jefferies price target is $39, and the consensus target is $38.05. Pfizer closed Tuesday at $33.89.


Even with the market trading at 2016 highs, all these stocks are not, and they make good sense for investors looking for solid total return potential. With earnings for all still set to come out, investors may want to buy partial positions and wait to see how the results are.

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