We cover dividend stocks often at 24/7, as they provide investors with much better income streams than U.S. government and corporate bonds have over the past five years. The usual suspects often are written about as great buy-and-hold ideas, like telecommunications, utilities and real estate investment trusts (REITs), because the dividends are dependable. However, in many cases, some of those stocks don’t have big upside potential and are considered more of a bond proxy to many investors, and they can be hurt by rising interest rates.
One area often ignored by growth and income investors is biotechnology, as the volatility in the sector, especially with companies that have only one or two income-producing therapies or medications, sometimes is deemed too risky. However, one major reason for growth stock investors with a solid risk tolerance to look at the sector now as it has been absolutely wasted this year.
In a year in which the major indexes are up over 20%, the VanEck Vectors Biotech ETF (NASDAQ: BBH) is down over 15%, and some of the major players in the industry have retreated much more than that. We screened out 24/7 Wall St. biotech research universe looking for stocks rated Buy that also paid a dividend. Five top companies look like awesome buys now. It is important to remember, though, that no single analyst report should be used as a sole basis for any buying or selling decision.
This is one of the top pharmaceutical stock picks across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.
One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.
AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.
Shareholders receive a 4.63% dividend. Truist Securities has a $135 price objective on AbbVie stock. The consensus price target is $132.01, and shares closed trading on Wednesday at $121.87.
This biotech giant remains a top stock for investors to buy and a safer way to play the massive potential growth in biosimilars. Amgen Inc. (NASDAQ: AMGN) discovers, develops, manufactures and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology and neuroscience.
- Enbrel to treat plaque psoriasis, rheumatoid arthritis and psoriatic arthritis
- Neulasta reduces the chance of infection due a low white blood cell count in patients cancer
- Prolia to treat postmenopausal women with osteoporosis
- Xgeva for skeletal-related events prevention
- Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis and oral ulcers associated with Behcet’s disease
- Aranesp to treat a lower-than-normal number of red blood cells and anemia
- Kyprolis to treat patients with relapsed or refractory multiple myeloma
- Repatha, which reduces the risks of myocardial infarction, stroke and coronary revascularization
Shareholders receive a 3.63% dividend. The Goldman Sachs target price is $258, and the consensus target is lower at $241.21. The final Amgen stock trade for Wednesday came in at $213.53.
This stock is trading a very reasonable 9.53 times estimated 2021 earnings and has big-time upside potential. Gilead Sciences Inc. (NASDAQ: GILD) is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in the areas of unmet medical need in the United States, Europe and elsewhere.
The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild and Atripla products for the treatment of human immunodeficiency virus (HIV) infection; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy and Viread for the treatment of liver diseases. It also offers Yescarta, Tecartus, Trodelvy and Zydelig products for the treatment of hematology, oncology and cell therapy patients.
In addition, Gilead provides Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; Ranexa, an oral formulation for the treatment of chronic angina; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. Gilead Sciences has collaboration agreements with Arcus Biosciences, Pionyr, Tizona, Tango Therapeutics, Jounce Therapeutics, Galapagos, Janssen, Japan Tobacco, Gadeta, Bristol-Myers Squibb, Merck and Novo Nordisk.
Gilead Sciences stock investors receive a 4.07% dividend. Oppenheimer’s $100 price target is the highest across Wall Street. It compares with the consensus target of $76.60 and Wednesday’s closing print of $69.71.
This is among the world’s largest pharmaceutical drug makers by sales and remains a top international pick across Wall Street. Novartis AG (NYSE: NVS) develops, manufactures and markets a range of health care products worldwide.
Novartis operates through three segments: Pharmaceuticals, Alcon and Sandoz. The Pharmaceuticals segment offers patented prescription medicines for oncology, neuroscience, retina, immunology and dermatology, respiratory, cardio-metabolic, established medicines and cell and gene therapies. Key products include Cosentyx (for psoriasis and others), Entresto (heart failure), Lucentis (wet macular degeneration) and Gilenya (multiple sclerosis).
The company recently acquired Arctos Medical, adding a preclinical optogenetics-based AAV gene therapy program and Arctos’s proprietary technology to its ophthalmology portfolio. Arctos developed its technology as a potential method for treating inherited retinal dystrophies and other diseases that involve photoreceptor loss, such as age-related macular degeneration. Arctos’s proprietary, light-sensitive optogene is delivered to specific retinal cells using gene therapy, thus turning the targeted cells into replacement photoreceptor-like cells.
Investors receive a 2.56% dividend. The Goldman Sachs price target in Swiss francs equals $120.68 in U.S. dollars. The consensus target for Novartis stock is just $104.80. The stock was last seen on Wednesday trading at $81.36 a share.