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These 3 Major Drug Manufacturers Are Strong Performers

- By Alberto Abaterusso

These major drug manufacturers have had positive performances on the stock market over the past week, month, year and three years.

Wall Street issued recommendation ratings of overweight to buy for all of them, meaning they will likely continue to head higher in the coming weeks.

Roche Holding AG (RHHBY) has climbed 2.4% over the last week, 0.5% over the past month, 5.7% so far this year, 17.6% over the last 52 weeks and 5.3% over the past three years through May 20.


Currently, the company is paying an annual dividend of $1.07 per common share, which, based on the closing share price on May 20, leads to a forward dividend yield of 3.27% versus the industry median of 1.66%. The company has paid dividends since 1993.

The stock closed at $33.11 per share on Monday for a market capitalization of $224.47 billion.

The company has a price-earnings ratio of 22 versus an industry median of 23.77, a price-book ratio of 8.36 versus an industry median of 2.64 and a price-sales ratio of 4.07 compared to the industry median of 3.1.

Roche has a financial strength rating of 7 out of 10 and a profitability and growth rating of 8 out of 10.

The Peter Lynch chart suggests the stock is overvalued.

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The stock has an overweight recommendation rating and an average target price of $35.93.

Merck & Co. Inc. (MRK) has gained 1.9% over the last week, 7.4% over the past month, 3.2% year to date, 35% over the last 52 weeks and 43.1% over the past three years through May 20.

Currently, Merck & Co is paying a quarterly dividend of 55 cents per common share, which, based on the closing price on May 20, leads to a forward dividend yield of 2.79% compared to the industry median of 1.66%. The company has paid dividends since September 1989.

The stock traded around $78.88 per share on Monday for a market capitalization of $203.09 billion. It has a price-earnings ratio of 24.88 versus the industry median of 23.77, a price-book ratio of 7.46 versus the industry median of 2.64 and a price-sales ratio of 4.86 versus the industry median of 3.1.

Merck has a financial strength rating of 6 out of 10 and a profitability and growth rating of 7 out of 10.

The Peter Lynch chart suggests the stock is overvalued.

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Merck has a buy recommendation rating and an average target price of $88.62 per share.

Novartis AG (NVS) has gained 1% over the last week, 8.2% over the past month, 7.6% year to date, 19.8% over the last 12 months and 21.8% over the past three years through May 20.

Currently, Novartis is paying an annual dividend of approximately $2.81 per share. Based on the closing price on Monday, the distribution leads to a forward dividend yield of 3.43% compared to the industry median of 1.66%. The company has paid dividends since 1997.

Shares of Novartis closed at $82.01 on Monday for a market capitalization of roughly $190.55 billion. The stock has a price-earnings ratio of 15.98 versus the industry median of 23.77, a price-book ratio of 4.11 compared to the industry median of 2.64 and a price-sales ratio of 3.81 compared to the industry median of 3.1.

Novartis AG has a moderate score of 5 out of 10 for financial strength, but a high score of 7 out of 10 for profitability and growth.

The Peter Lynch chart suggests the stock is not expensive.

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In addition, Novartis has an overweight recommendation rating and an average target price of $87.90.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.