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CrisisInvesting

叫做熊市股票更妥。

This Recession-Proof Company Has a Best-in-Class Dividend
By George Budwell – Feb 22, 2023 at 7:30AM
KEY POINTS

Pharmaceutical stocks can be top dividend plays due to their ability to generate profits in nearly any type of economy.
Among the eight largest U.S. drugmakers, Pfizer stands out as the most attractive pure-play dividend stock right now.
Amgen and Merck, however, also rank as top dividend stocks in this head-to-head comparison.
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Pfizer's highly attractive valuation, rock-solid dividend program, and enormous yield put it at the top of its big pharma peer group.

Pharmaceutical companies have a recession-proof business model. The simple reason behind this fact is that people do not choose when they get sick. So, for example, the pharmaceutical industry was largely unaffected by the devastating 2008 global recession. In fact, earnings per share among the industry's biggest names actually tracked higher, on balance, during that exceptionally bleak economic period.

The ability of pharmaceutical companies to shrug off economic downturns is one big reason investors often flock to them during bear markets. Not only do large-cap pharma companies offer shareholders a respite from marketwide volatility, but they also generally come with top-shelf dividend programs. Blue chip pharma stocks tend to be stellar passive income vehicles in any market environment.

Pills forming a dollar sign.
IMAGE SOURCE: GETTY IMAGES.

Pharma stocks do have one serious drawback, however. The expiration of key patents for top-selling medications can act as a major drag on earnings over extended periods of time. Companies do try to soften the impacts of patent expirations via organic pipeline development and business development activities. But the fact remains that aging legacy medications can dampen earnings power, and subsequently threaten the sustainability of a company's dividend program.

Which large-cap U.S. pharma stock is the best dividend play right now? To answer this question, let's check out how these companies stack up across several key metrics.

Comparison of dividend-paying U.S. pharma stocks
In order to make an apples-to-apples comparison, this analysis is being restricted to the eight largest U.S.-based pharma companies. This way, investors can directly compare yields without having to consider foreign tax issues.


So here is a quantitative breakdown of the most recent stock valuations and dividend programs of AbbVie (ABBV -0.88%), Amgen (AMGN -0.87%), Bristol Myers Squibb (BMY 0.13%), Eli Lilly (LLY 0.48%), Johnson & Johnson (JNJ -0.14%), Gilead Sciences (GILD -1.35%), Pfizer (PFE -0.75%), and Merck (MRK 0.08%).   

COMPANY        FORWARD P/E RATIO        P/S RATIO        DIVIDEND YIELD        PAYOUT RATIO        2024 REVENUE GROWTH (ESTIMATED)
AbbVie        13.2        4.58        3.91%        85%        0.3%
Amgen        13        4.81        3.54%        64%        4.9%
Bristol Myers Squibb        8.81        3.29        3.21%        74%        2.3%
Eli Lilly        37.5        10.8        1.38%        59%        19.1%
Johnson & Johnson        15        4.44        2.82%        66%        2.6%
Gilead Sciences        12.2        3.86        3.54%        80%        1.9%
Pfizer        12.5        2.45        3.8%        29.2%        2.1%
Merck        14.4        4.57        2.67%        49%        6%
Average        15.8        4.85        3.1%        63.3%        4.9%
DATA PROVIDED BY MORNINGSTAR. P/E = PRICE TO EARNINGS. P/S = PRICE TO SALES.

This pharma titan edges out its closest peer
All things considered, Pfizer is arguably the best of the bunch as a pure dividend play. It offers the second-highest yield behind AbbVie, its shares are among the cheapest in the group from both a forward-earnings and price-to-sales ratio perspective, and it sports the lowest trailing payout ratio by a wide margin. That said, the pharma titan's near-term growth prospects are rather modest as a result of its declining COVID-19 franchise.

Amgen, though, does come in a close second in this comparison. Amgen's shares sport an above-average yield, an attractive valuation by the forward-earnings metric, respectable revenue growth prospects in 2024, as well as a reasonable payout ratio for a top pharma stock. Income investors may want to also consider this elite pharma stock.

CrisisInvesting

经济衰退是必然的。软着陆根本不可能。

不过，高通胀可以稀释债务。
泡威耳曾担扰过一直没有通胀。