Blockbuster Drugs Come and Go. These 5 Pharma Dividend Stocks Keep Paying
Every big pharma company eventually watches its best-selling drug go generic, yet some keep raising their dividends anyway. The five names on this list have already replaced their fading blockbusters with something bigger, and the math behind their payouts tells…
Big drugmakers lose blockbusters to biosimilars and generics all the time. The strongest income payers keep paying anyway, because the next wave of drugs is already throwing off cash. This roster of five US-listed pharma companies is built around that idea: large payouts funded by durable product cash flow, with dividend safety first and yield second. One example sets the tone for the group. Amgen (NASDAQ:AMGN | AMGN Price Prediction) has a quarterly dividend that has rose every year in its recorded history, from $0.28 per share in 2011 to $2.52 in 2026.
AbbVie: Skyrizi and Rinvoq Now Carry the Payout
AbbVie (NYSE:ABBV) pays an annualized forward dividend of $6.92. With shares trading at $276.37, that works out to a forward yield of about 2.50%.
Dividend safety: GAAP figures understate AbbVie’s earnings power. GAAP earnings of $3.54 per share over the trailing twelve months were dragged down by acquisition charges, which puts the trailing P/E at 79 and the forward P/E at just 16. Measured against the low end of full-year adjusted EPS guidance of $13.87 to $14.07, the dividend takes about 49.9% of earnings. The free cash flow yield of 3.59% is well above the dividend yield. Leverage stands at 2.26x net debt to EBITDA with interest coverage of 6.94x. AbbVie completed its Apogee Therapeutics acquisition, and management has committed to “a net leverage ratio of two times within two to three years following the deal close.” On track record, the quarterly rate has gone up in each calendar year from 2014 through 2026, and it now stands at $1.73, up from $1.64.
Bull case: Skyrizi sales reached $5.51 billion (+24.4%) last quarter and Rinvoq hit $2.53 billion (+24.5%). That lifted total revenue to $16.99 billion, up 10.2%. The replacements to Humira are already big enough to fund the raises on their own.
Risk: Humira sales fell to $756 million (-35.9%), and Skyrizi has its own drop further out. Management put regulatory data protection at 2031 and the composition-of-matter patent at 2033.
Johnson & Johnson: A Long Raise Record Backed by Two Engines
Shares of Johnson & Johnson (NYSE:JNJ) yield about 2.17%, based on a $5.36 annualized dividend and a $247.47 share price. Shares fell 6.17% today as investors absorbed a new earnings report that showed pharma momentum offset by MedTech headwinds. That decline pushes the yield higher.
Dividend safety: After the second quarter, J&J guided to adjusted EPS of $11.60 to $11.75. Against the low end, the payout uses about 46.2% of earnings. Trailing EBITDA is $34.87 billion and the profit margin is 21.5%. It is also described as holding a AAA credit rating, which is the top of the scale. The quarterly dividend went to $1.34 from $1.30, and the recorded history shows a higher quarterly rate in every year from 2017 through 2026, with regular quarterly payments going back to 1999.
Bull case: DARZALEX brought in $4.21 billion (+18.9%) and TREMFYA $2.05 billion (+72.5%). Revenue guidance of $100.8 billion to $101.4 billion would be the company’s first year above $100 billion.
Risk: STELARA faces its biosimilar drop, with sales down to $740 million (-55.2%). TREMFYA has to keep filling that hole.
Gilead Sciences: HIV Cash Covers the Check Several Times Over
Gilead Sciences (NASDAQ:GILD) yields about 2.22% on a $3.28 annualized payout, with shares at $147.97.
Dividend safety: Gilead posted a GAAP net loss of $10.5 billion, driven by $11.18 billion of acquired IPR&D (research projects it bought from Arcellx, Tubulis and Ouro, which get expensed right away). Cash flow well covers the dividend. Second-quarter free cash flow was $3.43 billion, while the dividend costs roughly $1.02 billion a quarter at the current share count. The company still had room for $355 million of buybacks in the quarter. The quarterly dividend rose to $0.82 from $0.79, and the rate has gone up in every year from 2016 through 2026 after starting at $0.43 in 2015. The forward P/E is 16.
Bull case: HIV sales came in at $5.69 billion (+12%). Within that, Descovy grew 48% and the Yeztugo PrEP launch reached $232 million, up from $15 million. Full-year product sales guidance was raised to $30.1 billion to $30.4 billion.
Risk: The dividend leans heavily on one franchise, and the deal wave shrank the cash buffer from $10.6 billion to $3.2 billion. Those acquired pipelines have to deliver before Biktarvy’s growth, now 7%, slows further.
Amgen: Fifteen Years of Raises and Accelerating Free Cash Flow
Amgen yields about 2.44% on a $10.08 annualized dividend, with shares at $413.49.
Dividend safety: Measured against the low end of non-GAAP EPS guidance of $22.30 to $23.50, the payout takes about 45.2% of earnings. Second-quarter free cash flow rose to $3.49 billion (+83%), against a quarterly dividend bill of roughly $1.36 billion. The company has $57.3 billion of debt, and management made no buybacks in Q2, which keeps the cash focused on the dividend and paying down debt. The most recent increase lifted the quarterly rate to $2.52 from $2.38, a 6% increase.
Bull case: Amgen’s six key growth drivers grew 26% and now make up about 70% of product sales. Repatha delivered $953 million (+37%) and IMDELLTRA $288 million (+115%).
Risk: Biosimilars are already biting into the bone franchise. Prolia fell to $759 million (-32%) and XGEVA to $352 million (-34%), so the growth drivers have to keep outpacing that decline.
Bristol Myers Squibb: Highest Yield, Lowest Payout in the Group
Bristol Myers Squibb (NYSE:BMY) is the high-yield anchor of this roster. Its forward yield is about 4.45%, based on a $2.52 annualized dividend and a stock price of $56.60. The stock is down 10.15% over the past month.
Dividend safety: At the low end of non-GAAP EPS guidance of $6.75 to $7.00, the payout takes only about 37.3% of earnings. Second-quarter operating cash flow of approximately $3.4 billion covered the roughly $1.29 billion quarterly dividend cost with room to spare. The company held approximately $11.5 billion in cash and securities and paid down another $1.2 billion of debt in the quarter. The CFO pointed to “continuing to return cash to shareholders through our commitment to the dividend.” The quarterly rate is now $0.63, up from $0.62, and it has risen in every year from 2010 through 2026. The forward P/E is 9.
Bull case: The Growth Portfolio brought in $7.56 billion (+15%), led by Eliquis at $4.48 billion (+22%) and Camzyos at $416 million (+60%). Revenue guidance was raised to $49.0 billion to $50.0 billion.
Risk: Generics are eating away at the Legacy Portfolio. Revlimid fell to $425 million (-49%) and Pomalyst to $204 million (-71%), and total debt sits near $43.1 billion.
One Roster, One Income Thesis
All five of these drugmakers pay out less than half of forward adjusted earnings, and all five have raised their quarterly dividend every year for at least a decade. Each one is replacing a fading blockbuster with newer products that are already big enough to cut the check. Bristol Myers offers the most current income for the lowest valuation. AbbVie and Amgen pair solid yields with the fastest-growing replacement portfolios. Johnson & Johnson and Gilead round out the group with the richest balance sheet and the strongest free cash flow coverage.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
