7 High-Yield, Large-Cap Pharmas to Consider

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 |  Includes: AZN, BMY, GSK, LLY, MRK, PFE, SNY
by: Zvi Bar

Many investors appreciate the pharmaceutical manufacturer industry for its potential to produce both income and long-term growth. Several large-cap drug makers offer above-average yields, and have records of growing their business and payouts over the long term.

Additionally, historically, many drugmakers have acted resiliently during economic downturns and recessions. These companies are often considered defensive stocks. They still can go down in share value, but many believe that this industry currently represents a strong long-term value, as several of these companies will continue to pay substantial dividends, benefit from emerging market growth and continue to develop new medical advancements. Additionally, medical price increases tend to outpace inflation.

Below are 7 drug manufacturers that have a market capitalization of at least $40 billion and yields of at least 3%, above the Dow Industrial Average’s 2.45% and S&P 500’s 1.84%. These companies traditionally keep their dividends above average. I have also included their 5-year dividend histories, which show that some have had to cut or maintain their payout at the same rate for an extended period. Nonetheless, the longer term trend is for the dividends to grow.

1. AstraZeneca (NYSE:AZN)

  • Country: United Kingdom
  • Current Yield: 3.6%

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2. Bristol-Myers Squibb (NYSE:BMY)

  • Country: United States
  • Current Yield: 4.2%

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3. Eli Lilly (NYSE:LLY)

  • Country: United States
  • Current Yield: 5%

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4. GlaxoSmithKline (NYSE:GSK)

  • Country: United Kingdom
  • Current Yield: 4.8%

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5. Merck (NYSE:MRK)

  • Country: United States
  • Current Yield: 4.2%

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6. Pfizer (NYSE:PFE)

  • Country: United States
  • Current Yield: 4%

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7. Sanofi-Aventis (NYSE:SNY)

  • Country: France
  • Current Yield: 3.3%

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Many of these companies appreciated considerably since the recent market bottom, and may be due for a cooling period. It appears likely that several of these companies will institute dividend increases in the coming quarters. Nonetheless, this group already provides an income investor a yield comparable to a long-term bond, with far greater prospects of capital appreciation and yield growth.

Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.