The stock market rally ran into the harsh reality last Friday that any interest rate pivot by the Federal Reserve may not come until 2024. As summer comes to a close with the Labor Day holiday next Monday, the bear market rally that started in June also has ended. The always bullish Wall Street crowd will try to talk up the market damage as a buying opportunity, but it is clearly a time to move to safer dividend stocks. One sector perfectly fits the bill now.
The health care sector offers great companies with demand for their products that does not change much due to inflation or recession fears. While those seeking over-the-counter products can shift to lower-priced brands, prescription drugs with no or limited generics are somewhat shielded.
We screened our 24/7 Wall St. health care research database and found eight top stocks that are Buy rated on Wall Street and pay safe, and in some cases big, dividends. These stocks make sense for worried investors now.
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 a top pharmaceutical stock pick across Wall Street. 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 2020.
The bad news for shareholders is that 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 4.14% dividend. Wells Fargo has a Wall Street high target price of $200 on AbbVie stock. The consensus target is $159.24, and shares closed trading on Monday at $135.71.
This biotech giant remains a safer way to play the massive potential growth in biosimilars. Amgen Inc. (NASDAQ: AMGN) discovers, develops, manufactures and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology and neuroscience.
Amgen products include the following:
- Enbrel to treat plaque psoriasis, rheumatoid arthritis and psoriatic arthritis
- Neulasta reduces the chance of infection due a low white blood cell count in patients with cancer
- Prolia to treat postmenopausal women with osteoporosis
- Xgeva for skeletal-related events prevention
- Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis and oral ulcers associated with Behcet’s disease
- Aranesp to treat a lower-than-normal number of red blood cells and anemia
- Kyprolis to treat patients with relapsed or refractory multiple myeloma
- Repatha, which reduces the risks of myocardial infarction, stroke and coronary revascularization
Shareholders receive a 3.22% dividend. Oppenheimer’s $290 target price is well above the $253.17 consensus target. The final Amgen stock trade for Monday was at $240.51.
This top company remains a solid pharmaceutical stock to own long-term. Bristol Myers Squibb Co. (NYSE: BMY) discovers, develops, licenses, manufactures and markets pharmaceutical products worldwide in the hematology, oncology, cardiovascular and immunology therapeutic classes.
Its products include the following:
- Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
- Opdivo for anti-cancer indications
- Eliquis, an oral inhibitor targeted at stroke prevention in adult patients with non-valvular atrial fibrillation, and the prevention and treatment of venous thromboembolic disorders
- Orencia for adult patients with active RA and prostate-specific antigen, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis
- Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
- Yervoy for the treatment of patients with unresectable or metastatic melanoma
- Abraxane, a protein-bound chemotherapy product
- Reblozyl for the treatment of anemia in adult patients with beta thalassemia
Bristol-Myers Squibb stock comes with a 3.23% dividend. The J.P. Morgan price target is $85, and the consensus target is $81.44. Shares closed over 6% lower on Monday at $66.75, after a trial for a stroke drug showed mixed results.
This is a top stock that has remained strong despite recent stock market weakness. CVS Health Corporation (NYSE: CVS) is one of the largest healthcare companies in the United States, providing retail, mail, and specialty pharmacy dispensing services and pharmacy benefits. CVS has become one of the most vertically integrated publicly traded healthcare companies.
CVS serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans (PDPs), Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans, and individuals. This segment operates retail specialty pharmacy stores; and specialty mail order, mail order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services.
The company completed a $69 billion purchase of health care provider Aetna in November of 2018 and remains one of the top picks for 2022. CVS has become one of the most vertically integrated publicly traded health care companies, and health care has lagged the S&P 500 significantly this year.
CVS Health stock investors receive a 2.18% dividend. The $127 UBS price target compares with a consensus target of $120.14 and the most recent close at $100.33.
This is another large-cap pharmaceutical with solid upside potential, and it is a great pick for conservative investors. 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.
Shareholders receive a 1.24% dividend. Morgan Stanley recently raised its price target to a Wall Street high of $395. The consensus target is $304.28. Eli Lilly stock ended Monday trading at $310.15 a share.
This stock is trading a very reasonable 9.05 times estimated 2022 earnings and has big-time upside potential. Gilead Sciences Inc. (NASDAQ: GILD) is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in the areas of unmet medical need in the United States, Europe and elsewhere.
The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild and Atripla products for the treatment of human immunodeficiency virus (HIV) infection; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy and Viread for the treatment of liver diseases. It also offers Yescarta, Tecartus, Trodelvy and Zydelig products for the treatment of hematology, oncology and cell therapy patients.
In addition, Gilead provides Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; Ranexa, an oral formulation for the treatment of chronic angina; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections.
Investors take a 4.68% dividend to the bank every quarter. Royal Bank of Canada’s $77 price objective is one of the highest on Wall Street. The consensus target on Gilead Sciences stock is $69.17, and Monday’s closing print of $62.45.
Merck & Co. Inc. (NYSE: MRK) remains a leading health care stock for conservative investors. Its Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular and diabetes, as well as vaccine products, such as preventive pediatric, adolescent and adult vaccines.
The company’s Animal Health segment discovers, develops, manufactures and markets veterinary pharmaceuticals, vaccines and health management solutions and services, as well as digitally connected identification, traceability and monitoring products.
Merck serves drug wholesalers and retailers; hospitals; government agencies; managed health care providers, such as health maintenance organizations, pharmacy benefit managers and other institutions; and physicians and physician distributors, veterinarians and animal producers. The company has collaborations with AstraZeneca, Bayer, Eisai, Ridgeback Biotherapeutics and Gilead Sciences to jointly develop and commercialize long-acting treatments in HIV.
Investors are paid a solid 3.09% dividend. The target price at Goldman Sachs is $105, and Merck stock is on the firm’s Conviction List of top picks. The consensus target is $100.68, and Monday’s closing print was $87.59.
This top pharmaceutical stock was one of the winners in the COVID-19 vaccine race. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes and sells biopharmaceutical products worldwide.
The company offers medicines and vaccines in various therapeutic areas, including the following:
- Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
- Biologics, small molecules, immunotherapies and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena and Braftovi brands
- Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga and Paxlovid brands.
- Pneumococcal disease, meningococcal disease, tick-borne encephalitis and COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba and the Prevnar family brands
- Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis and Cibinqo brands
- Amyloidosis, hemophilia and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX and Genotropin brands
Shareholders receive a 3.42% dividend. The BofA Securities price objective is $70. The consensus price target is just $58.25. On Monday, Pfizer stock was last seen trading at $46.23.
These are eight outstanding stocks to look at now. September is annually one of the worst months of the year for stocks, as both the Dow Jones industrials and the S&P 500 have averaged a 1% decline. So, it makes sense now to move from volatile sectors to health care. While these stocks are not immune to downside drafts in the stock market, they should hold up much better than most.
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