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In the following article, I will discuss five healthcare companies which I believe are likely to pay high dividends in the coming years. I chose these names because I would be a buyer at their current earnings multiples.

AstraZeneca (NYSE:AZN)

The stock has been trading between $40 and $52 a share. The company shares yield 8.2%. The current stock price is around $47. In spite of the level of the stock price, the company is going through a major downturn: It recently announced that it was going to cut 7,300 jobs worldwide, which will impact R&D neuroscience in particular. It is threatened by loss of patent protection on its major blockbusters Seroquel, Nexium and Crestor. However, the firm's competitors have been doing well: GlaxoSmithKline (NYSE:GSK), Novartis (NYSE:NVS), and Merck (NYSE:MRK), with revenues ranging from around $43 billion to $59 billion. AZN shows the highest EPS (around $ 7 versus $ 2) against its competitors, but the lowest P/E (5, Merck being the highest at 43). Glaxo has also known a drop in revenue and gross margin (around 3%) but remains a solid company.

Like all big pharma, including AstraZeneca, Glaxo struggles to improve its product pipeline and R&D productivity, but has the biggest price to earnings ratio. Merck has been luckier with the approval of its anti-hepatitis C drug in spite of its negative interactions with anti-HIV medicines. I believe AstraZeneca is currently doing some house cleaning, which will increase its profitability and improve its pipeline productivity. This gives the stock a lot of potential to reach much higher levels. Therefore I recommend buying this stock given this high return potential and dividend yield.

Eli Lilly & Co (NYSE:LLY)

The current stock trades around $39. Historically the stock has been slowly rising, even if it tumbled somewhat in February 2012. Eli Lilly has the lowest R&D cost per drug ($4.5 billion) compared to peers like AstraZeneca ($12 billion). Like all big pharma the firm is struggling with the renewal of its pipeline, although the diabetes franchise is still very strong. The shares still yield dividends of 4.90%. Eli Lilly's revenue reached $24 billion in 2010, a figure which remains modest compared to its peers like Pfizer (NYSE:PFE), Sanofi (NYSE:SNY) and Glaxo, ranging from $67 billion to $42 billion.

Contrarily to its peers, Eli Lilly has always focused on internal growth. CEO John Lechleiter is a company and industry veteran, and this is the case for most of the executive management. Eli Lilly has a history of producing high quality compounds, that were real therapeutic breakthroughs (Prozac). There are still good products in the pipeline, particularly in the diabetes and oncology franchise -- the approval of Byetta and of the approved use of Cialis in oncology by the FDA in October 2011. Eli Lilly holds firm in spite of a drawback with the withdrawal of Xigris at the same time. I believe Eli Lilly is a good value to buy because of its dividend yield, the quality of its management and R&D highly recognized in the industry.

GlaxoSmithKline (GSK)

The stock currently trades around $45. It has been on an upward trend since 2011 going from $38 to $46. At the end of 2011 the company collected a series of bad news with its Avandia and Paxil drugs. The cost of lawsuits regarding those problems might impact the bottom line, although most of them have been settled, which minimizes risks for investors. Glaxo sales growth has been slower (around 11%), and its current goal is to sustain growth through its products launched in 2009, like Aryxtra an anti-clotting coagulant, while its oncology drug Tykerb had some setbacks at the end of 2011.

However, Glaxo remains a strong value with $43 billion revenue, 73.5% gross margin, operating cash flow is in the $12 billion range. Of course the firm competes with other big pharma, like Sanofi and Novartis, which experience similar pipeline issues. For instance, Novartis had to recall Excedrin because of mislabeling. Glaxo shares yield 5.90%. I strongly recommend to buy the stock because of a strong pipeline, high dividend payouts and modest risk on earnings.

PDL BioPharma (NASDAQ:PDLI)

The current stock price is around $6, and the stock price has been between $5 and $6 throughout this 52-week period. The shares have one of the highest yields at 9.40%. The company announced $0.15 of dividend per common stock for the last quarter of 2011, which then leaves dividend yield around the same level of 10%. The company made $344 million in revenue, around 30% net income and $184 million in cash flow, which is an impressive performance compared to its competitors including Amgen, which had around $15 billion sales in 2010 though. Others (Xoma and Seattle Genetics Inc.) are well behind in revenue and currently have a loss, while PDL has the highest profit to sales ratio.

Compared to the industry, the company's P/E is twice as low at around 8 while its EPS is at $0.76 compared to around $4 for Amgen. This could mean that for an investor the stock is almost perfect: It has room for increase of its P/E and/or EPS. However investors have to keep in mind that the firm obtains most of its revenue from development and licensing of antibodies, which explains its high profit margin. On the downside, PDL announced a -3.5% pre-market downward guidance. I however recommend buying the stock because it still has a high earning potential both due to its P/E and EPS and great dividend yield.

Bristol-Myers Squibb (NYSE:BMY)

The current stock is around $32.The stock has been rather stable over a 52-week period. The shares yield 4.30%. The firm makes $19 billion in revenue, around 15% in net income, and more than $4 billion in cash flow. Plavix remains one of the major blockbusters of the company although its patent expired. Bristol Myers together with Sanofi won most of the trials against generic companies, which gives confidence in the company's ability to fight against competition. Bristol-Myers also pursues the development of new drugs through outside collaborations, like the one it concluded to acquire rights on Medivir against hepatitis C. This is just one out of twelve business development deals concluded in 2011.

In addition, the company got four product approvals: Yervoy and Nulojix in both the US and Europe, and Eliquis in Europe for the prevention of venous thromboembolic events. The firm has delivered excellent 2011 fourth quarter results showing $11 billion in cash flow. These solid financials make me recommend buying the stock as new product sales (results of those approvals) should jump in 2012 and 2013 and spur further growth.

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

Source: Healthcare's Big Dividend Yielders