Bristol Myers Squibb (BMY)

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The 4 Best Dividend Stocks in Pharmaceuticals

Cory Renauer (TMFang4apples) Apr 18, 2017 at 11:04AM

If you're looking for steadily growing income, the pharmaceutical industry boasts plenty of dividend-paying stocks. Not all of them are created equal, though, and plenty of investors in this space have seen their payouts frozen or slashed in recent years as their leading products succumbed to generic competition.

Luckily, Bristol-Myers Squibb Co. (NYSE:BMY), Eli Lilly and Co. (NYSE:LLY), Johnson & Johnson (NYSE:JNJ), and Pfizer Inc. (NYSE:PFE) possess the right combination of outperforming products and potential growth drivers to continue to raise their distributions for many years to come. Come see for yourself why these are the best dividend stocks in big pharma you can buy now.

Bristol-Myers Squibb Co.: In the bargain bin
At recent prices, shares of this pharmaceutical company offer investors a nice 2.8% yield that they can reasonably expect will keep rising for years to come. Over the past year, the company used about 57% of profits to make payments, and the company's bottom line is climbing on the back of Opdivo, a promising cancer therapy that helps patients' immune systems attack their tumors.

In recent months, Bristol-Myers Squibb stock has fallen to bargain-bin prices, largely because Opdivo failed to outperform standard chemo in a trial with newly diagnosed lung cancer patients. Although Opdivo appears unlikely to become a first-line treatment option for this large patient population, it's important to view the setback in light of the drug's impressive track record. Since earning its first approval at the end of 2014, the drug is now approved for 11 indications across six tumor types and generated sales of $3.8 billion in 2016.

Bristol-Myers Squibb's oncology success isn't limited to Opdivo. Orencia and Sprycel both grew annual sales by double-digit percentages last year and contributed $2.3 billion and $1.8 billion, respectively, to the company's top line. Beyond oncology, the company's next-generation blood thinner Eliquis, which is marketed in partnership with Pfizer, continues to exceed expectations. Last year, sales of the anticoagulant jumped 80% to $3.3 billion.

Bristol's stable of growth drivers could push up total profits at a blazing pace for a big pharmaceutical company. The average analyst following the company expects earnings to increase at an 11.8% annual growth rate over the next five years. The company is poised to continue to grow, with 10 new immuno-oncology candidates in clinical trials across 35 tumor types.
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https://www.fool.com/investing/2017/04/18/is-abbvie-a-great-dividend-stock-for-your-portfoli.aspx

BMY