Dividends are always great. They provide consistent income and can help improve the total return on an investment. The market is currently serving up some great dividend stocks in the healthcare industry. Each of these stocks have yields that are 4% or greater. That’s much better than the return that you will get on any savings account, certificate of deposit or treasury bond.
Here are 4 solid dividend plays.
Pfizer has been dead money for sometime now. The stock may trade like a bond but the dividend is still a great yield. Pfizer is offering a 4.2% yield and the dividend payout at 65% is high but sustainable. There is room for a dividend boost as Pfizer’s Wyeth purchase has helped stabilize its earnings.
Eli Lilly and Company (LLY)
If you think that Pfizer has an impressive yield, then take a look at Eli Lilly. Eli Lilly is the world’s largest manufacturer of psychiatric drugs. The company is currently yielding 5.5% and there is room for growth in the future. The current payout is less than one half of earnings per share.
GlaxoSmithKline has recently had a number of drugs come off patent over the past few years. The company has been able to maintain its revenue base despite those losses. Glaxo’s shares are currently yielding 4.6%. The dividend payout is high at 77% of earnings but the company has a large cash hoard to fall back on. Glaxo has over $10 billion in cash on its balance sheet.
Bristol Myers Squibb (BMY)
Bristol Myers is paying investors a generous 4.7% yield. The current payout ratio is 59% based on 2010’s earnings of $2.17 per share. Shares are trading at 13 times earnings and the company has several new promising drugs in its pipeline. Investors will be rewarded with the dividend in the meantime, while waiting for profit growth.
Disclosure: No positions