Jim Trippon's  Instablog

Jim Trippon
Send Message
Jim Trippon is a certified genius, a member of MENSA, and the epitome of the “Overachieving Entrepreneur.” He’s an internationally renowned and globally experienced investment expert, dedicated to finding undervalued, “under the radar” investments for his worldwide clients and subscribers. He... More
My company:
Trippon Financial Research, Inc.
My blog:
Global Profit$ Alert
My book:
Stay Rich Forever: Retirement Planning Secrets of Millionaires and How They Can Work For You!
  • Farming For Dividends With Big Pharma 0 comments
    Mar 10, 2011 8:57 AM | about stocks: ABT, LLY
    One sector that we have yet to discuss that holds a lot of potential for income investors is pharmaceuticals, particularly the larger players in the industry. First, we should remind investors that just because a company is a large pharmaceutical maker, that doesn't guarantee a dividend. We're talking about biotech stocks here. Obviously, biotech companies manufacture drugs, but most of them do not pay dividends. Even Amgen (Nasdaq: AMGN), the biggest, and some would argue best of breed biotech play, doesn't pay a dividend. So if you're seeking dividends in the pharmaceutical sector, stick with the more traditional names.


    Pfizer On The Rebound?

    Pfizer was a dividend offender back in 2009 as the company was scrambling for ways to conserve cash in the wake of its massive Wyeth acquisition, but the company did raise its dividend last year and the yield currently rests around 4%. The capital appreciation has been there, too, as Pfizer has risen 12% year-to-date, double the performance of the Dow Jones Industrial Average of which Pfizer is a member. Several of Pfizer's biggest drugs come off patent this year and while we don't make guarantees, the company may be inclined to raise the dividend again this year to keep investors appeased.

    We Love This Kind Of Consistency

    Abbott Laboratories (NYSE: ABT) is everything an income investor should be looking for in ANY sector, but it is a pharma dividend stand out. Adjusted for stock splits, Abbott's annual dividend has risen from around 25 cents in 1989 to $1.92 a share today. Abbott is another name working on a multi-decade streak of annual dividend hikes and that includes an increase in 2010.

    It's hard to argue that Abbott is one of the higher-quality names in the pharma sector and the stock is cheap at 10 times forward earnings. The dividend appears safe as Abbott's pay out ratio is 58% and the company has the balance sheet to support future dividend hikes.

    dividend,dividend stock,dividends,dividend stocks,high dividend stocks,high yield dividend stocks,best dividend stocks,dividend investing,dividend investment,dividend genius,dividend stock genius,global profits alert,jim trippon

    Lilly's High Yield

    With a yield of 5.7%, Eli Lilly (NYSE: LLY) is the top yielder among major blue-chip pharma stocks and like Pfizer, it faces some issues with an important patent expiration later this year. As the chart below indicates, Lilly had been steadily growing its dividend prior to the onset of the financial crisis, but there hasn't been a dividend increase since 2009. Still, with a P/E ratio below eight and a payout ratio of 50%, this would be a pharma name for conservative, income-minded investors to consider.

    dividend,dividend stock,dividends,dividend stocks,high dividend stocks,high yield dividend stocks,best dividend stocks,dividend investing,dividend investment,dividend genius,dividend stock genius,global profits alert,jim trippon

    Overall, in the absence of new marquee drugs and pipelines that leave something to be desired, dividends are once again the most compelling reason to consider big pharma. The set of challenges facing the group is nothing new, so it can be argued that the worst news is already priced into these stocks, meaning any bit of news could provide capital appreciation on top of tidy dividends.

    Click HERE to learn more about the Dividend Genius - Smart Research on High-Yield Stocks
    How to Profit from the "Perfect Storm" in the Financial World

    A certain confluence of events have created the ideal scenario for investing in a handful of high-yield, dividend-paying stocks.

    These safe, cash-gushing companies paid our subscribers 62% in yields plus share price appreciation in 2009.

    Get the FREE juicy details here.

    For more information and archived issues, visit http://www.globalprofitsalert.com

    Global Profits Alert (GPA) is published by Trippon Financial Research, Inc. a financial media organization with offices in the United States, Hong Kong and Mainland China. GPA is written by Jim Trippon in conjunction with George Wolff, Sunny Wang, Todd Shriber, Kelley Damiani and J. Daryl Thompson.

    Would you like to republish this article? Global Profits Alert issues can be republished, as long as the republished issues contain the name of the author(s) and the following short paragraph:

    This information was brought to you by GlobalProfitsAlert.com, a publication of Trippon Financial Research, Inc. GlobalProfitsAlert.com publishes information on Investing in the China stock market and emerging markets, dividend stock and income investing, exchange traded funds (ETFs), green energy stocks, technology stocks, global market trends and other investment information. To view archives or subscribe, visit http://www.globalprofitsalert.com.

    Stocks: ABT, LLY
Back To Jim Trippon's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.