This is where to find more stability and less risk.
The coronavirus contagion has caused many investors to take a hard look at their portfolio. Volatility has sent many names tumbling, and Wall Street is increasingly looking for less risk as traders sell growth-oriented names and turn to more reliable businesses. Health care is about as reliable a sector as you'll find, since patients will seek care regardless of consumer spending trends. Particularly at a time when economic fears are driven by a public health scare, drugmakers seem the perfect low-risk investments. If you're looking for stable dividend payers in health care, these eight drug companies are worth considering.
AbbVie (ticker: ABBV)
AbbVie is a drug development company that finds its origins in a 2013 spinoff from Abbott Laboratories (ABT) in an effort to separate the research-driven ABBV operations from the generics, nutrition and device sales of Abbott. ABBV's dominant product at present is Humira, a treatment for various autoimmune disorders including psoriasis and Crohn's disease. However, its lineup of drugs includes cancer and hepatitis treatments, and other brisk-selling treatments that add up to consistent revenue and payouts to investors.
Current yield: 5.2%
AMGN focuses on biochemistry to combat diseases through the use of treatments derived from biologic sources instead of chemicals. These unique treatments target challenging conditions including cancer, bone disorders and kidney disease. Founded 40 years ago, with a rich history of research and drug development, Amgen is also one of the world's largest independent biotech stocks with a market value of more than $120 billion. Income investors will like its track record.
Current yield: 3%
Gilead Sciences (GILD)
Gilead is a research-based biopharmaceutical company that focuses on rare diseases that are often overlooked by other medical companies. The result is a wide portfolio of drugs for liver conditions, HIV and lymphoma. Individually, many of these treatments don't stand out like mainstream blockbusters for heart disease, but they typically come with high price tags -- and most importantly, serve patients who otherwise might have had their medical needs go unmet.
Current yield: 3.6%
GlaxoSmithKline is a powerhouse of the health care industry, marketing pharmaceutical products, vaccines and over-the-counter drugs. Drugmakers in general tend to have steady revenue trends, but GSK's diversified operations make it even more reliable than its peers. Admittedly, that limits some of the upside in that research into new cures is balanced out with boring old consumer products like Tums, Nicorette and Aquafresh brands. But the lower risk profile that comes with this company should be very appealing for long-term income investors.
Current yield: 5.6%
Novartis offers prescription medicines across a host of areas including ophthalmology, neuroscience, immunology, dermatology and cardiovascular medicine. It's one of the largest and most respected drugmakers on the planet with a market capitalization of nearly $200 billion. One issue for many investors, however, is that Novartis is a Swiss-based stock and thus follows the common European practice of paying its dividends only once per year. The yield is generous, but it's worth noting the sporadic schedule if you depend on more regular payments.
Current yield: 3.5%
PetMed Express (PETS)
You may think it's a bit odd for a pet pharmaceuticals company to make this list, but the reality is that most people see their cats and dogs as members of their family. Many Americans are increasingly spending big bucks on drugs that will extend and improve their pets' lives. Though the smallest stock on this list with a market cap of only about $500 million, PETS is a dominant force in the nearly $20 billion American veterinary care market. That makes it just as reliable as drug companies catering to humans and supports equally generous dividends.
Current yield: 4%
Sanofi is a Paris-based drug company that has a wide range of products. Its patented therapeutics look to ameliorate chronic conditions ranging from multiple sclerosis to Gaucher disease and rheumatoid arthritis. On top of this, SNY also does a brisk business producing vaccines and selling over-the-counter drugs to consumers. With a diversified portfolio of offerings and the scale that comes with a $120 billion market value, SNY is one of the safest bets in health care.
Current yield: 3.5%
Takeda Pharmaceutical Co. (TAK)
Keeping with the international flavor, Takeda is a Japan-based drug company that is the largest pharmaceutical company in Asia, and has a host of treatments that target metabolic disorders, gastroenterology, neurology, inflammation and oncology applications. Japan is well-known for its comparatively older population, with a median age of more than 47 years in the nation while America's median age is just 38 years or so and faster-growing emerging markets are much younger still. However, while this is a challenge for some sectors, it is a boon to drugmakers like Takeda that help older people live longer and more productive lives.
Current yield: 4.5%
Best pharmaceutical stocks to buy for income:
-- AbbVie (ABBV)
-- Amgen (AMGN)
-- Gilead Sciences (GILD)
-- GlaxoSmithKline (GSK)
-- Novartis (NVS)
-- PetMed Express (PETS)
-- Sanofi (SNY)
-- Takeda Pharmaceutical Co. (TAK)
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