I have been using the recent sell-offs to pick up blue chip companies in defensive sectors that have high dividend yields. One I like here is Sanofi-Aventis.
Sanofi-Aventis (SNY) - "Sanofi-Aventis engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. The company offers a range of healthcare assets, including a broad-based product portfolio in prescription drugs, OTC/OTX, generics, vaccines, and animal health". (Business description from Yahoo Finance) Here are six reasons to like SNY at $35 - (click chart to enlarge)
- It looks like it has medium-term technical support in the $33 to $35 range (See Chart)
- SNY provides a solid dividend yield of 3.8% and has raised its dividend payout by an average of 19% annually over the last five years.
- Sanofi – Aventis is selling at the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.
- SNY trades at just over 7 times this year’s expected earnings and consensus EPS for 2012 has risen over the past three months.
- The Genzyme acquisition should contribute meaningfully to EPS by 2013 as well as widening SNY’s footprint in biotechnology. S&P estimates the acquisition will contribute an incremental 50 to 70 cents to EPS by 2013.
- S&P has a price target of $44 on SNY and the median analyst target on Sanofi is $47 a share currently.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SNY over the next 72 hours.