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As more signs appear that inflation is rising globally, it makes sense to look at drug stocks that have historically done well in times like this. The major drug stocks listed below offer a generous dividend yield of about 5% and they all have low PE ratios. The dividends are very attractive and can rise in time along with inflation. The valuations on these stocks could also rise and investors will be paid to wait while collecting regular dividends. Data is sourced from Yahoo Finance, Finviz.com and company websites.

Bristol-Myers Squibb Company (NYSE:BMY): BMY's annual dividend payment is $1.32 which is equivalent to a 5.18% yield. Dividends are paid 33 cents per quarter. Forward PE ratio is about 12.56.

Astrazeneca PLC (NYSE:AZN): AZN's dividend payment is about $2.55 per share which is equivalent to a 5.30% yield. Dividends are paid twice a year, with a greater proportion in the second payment. Forward PE ratio is about 8.1.

Eli Lilly & Co (NYSE:LLY): LLY's annual dividend payment is $1.96 which is equivalent to a 5.75% yield. A dividend of 49 cents per share is paid per quarter. Forward PE ratio is about 9.29.

Merck & Company, Inc. (NYSE:MRK): MRK's dividend payment is $1.52 per share which is equivalent to a 4.76% yield. Dividends are paid 38 cents per quarter. Forward PE ratio is about 8.2.

Of all these, I prefer Merck. It is based in the US, the PE ratio is one of the lowest and the dividend is almost 5%. You can read more about why I like Merck here.

Merck has a dividend reinvestment plan (DRIP) which allows shareholders to reinvest their dividends into more Merck shares. Here are details on the plan.

Disclosure: I am long MRK.
Source: Four High Yield Drug Stocks With Upside Potential