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I am a private investor who has invested in individual stocks for over a decade. I have a BBA from the University of Texas at Austin. I am retired and living off of dividends and distributions from a portfolio of BDCs, consumer staple stocks, MLPs, regional banks and REITs.
  • Health Care / Pharma Stocks 8-22-14 0 comments
    Aug 22, 2014 9:13 PM
    Health Care / Pharma Stocks 08-22-14

    Yield in the spreadsheet below is based on the Q2-14 dividend. Spreadsheet header abbreviations: Div = dividend; EPS = earnings per share; LTM = last twelve months; YTD = year to date. The dividend to EPS ratio is a measure of dividend safety. At this point in time, companies that pay dividends once per year have had their payouts divided by four and encoded in this data is if they paid a quarterly dividend. RHHBY had a two for one stock split on 2-27-14 -- and that change is not reflected in the data below. BCR has raised its Q3-14 dividend by a penny.


        12-31-13 08-22 Div Current Div/ Div/ Percent Change
    Company and ticker Price Price /Quarter Yield EPS14 EPS15 Price Pr+Div EPS14 Target Div 1yr Div 3yr

    AbbVie Inc. (NYSE:ABBV) 52.81 55.20 0.420 3.04 53% 43% 4.53 6.91 -0.32 36.36 5.00 na
    AmerisourceBergen Corporation (NYSE:ABC) 70.31 76.60 0.235 1.23 24% 22% 8.95 9.61 5.42 21.30 11.90 34.78
    Abbott Laboratories (NYSE:ABT) 38.33 42.11 0.220 2.09 39% 36% 9.86 11.58 1.36 20.40 57.14 -1.45
    Allergan Inc. (NYSE:AGN) 111.08 165.56 0.050 0.12 3% 2% 49.05 49.14 6.23 74.64 0.00 0.00
    Amgen Inc. (NASDAQ:AMGN) 114.08 132.82 0.610 1.84 29% 27% 16.43 17.50 2.82 17.82 29.79 na
    AstraZeneca PLC (NYSE:AZN) 59.37 73.05 0.950 5.20 86% 92% 23.04 26.24 -5.58 18.16 35.71 13.58
    Baxter International Inc. (NYSE:BAX) 69.55 75.04 0.520 2.77 40% 39% 7.89 9.39 0.58 19.39 6.12 22.58
    Bayer AG (OTCPK:BAYRY) 142.00 131.55 0.526 1.60 26% 23% -7.36 -5.88 -9.42 19.22 16.63 10.23
    CR Bard Inc. (NYSE:BCR) 133.94 147.00 0.210 0.57 10% 9% 9.75 10.22 8.34 16.96 5.00 5.56
    Becton, Dickinson and Company (NYSE:BDX) 110.49 116.97 0.545 1.86 35% 32% 5.86 6.85 0.32 14.15 10.10 10.98
    Bristol-Myers Squibb Company (NYSE:BMY) 53.15 50.18 0.360 2.87 80% 83% -5.59 -3.56 2.26 6.18 2.86 3.03
    Covidien PLC (COV) 68.10 88.26 0.320 1.45 32% 29% 29.60 31.01 15.19 41.24 39.13 26.93
    GlaxoSmithKline PLC (NYSE:GSK) 53.39 47.68 0.640 5.37 78% 73% -10.69 -7.10 -14.29 8.01 16.36 7.22
    Johnson & Johnson (NYSE:JNJ) 91.59 103.10 0.700 2.72 47% 44% 12.57 14.10 1.37 22.76 6.06 7.60
    Eli Lilly and Company (NYSE:LLY) 51.00 62.32 0.490 3.15 71% 62% 22.20 24.12 -1.07 18.96 0.00 0.00
    McKesson Corporation (NYSE:MCK) 161.40 192.00 0.240 0.50 11% 9% 18.96 19.26 -0.48 24.57 9.09 11.11
    Medtronic Inc. (NYSE:MDT) 57.39 63.59 0.305 1.92 32% 30% 10.80 12.40 0.00 29.07 8.93 8.50
    Merck & Co. Inc. (NYSE:MRK) 50.05 59.17 0.440 2.97 50% 49% 18.22 20.86 0.29 16.42 2.33 5.26
    Novo Nordisk A/S (NYSE:NVO) 36.95 45.33 0.207 1.83 46% 41% 22.68 24.93 32.85 15.22 30.34 42.76
    Novartis AG (NYSE:NVS) 80.38 88.95 0.680 3.06 53% 48% 10.66 12.35 -6.20 20.22 7.51 5.20
    Pfizer Inc. (NYSE:PFE) 30.63 28.92 0.260 3.60 46% 46% -5.58 -3.89 -0.88 11.91 8.33 10.00
    Perrigo Company PLC (NYSE:PRGO) 153.46 149.22 0.105 0.28 7% 6% -2.76 -2.63 -6.34 8.44 16.67 16.67
    Roche Holding AG (OTCQX:RHHBY) 70.20 72.64 0.549 3.02 53% 49% 3.48 6.60 -3.51 19.50 8.66 9.30
    St. Jude Medical Inc. (NYSE:STJ) 61.95 64.55 0.270 1.67 27% 25% 4.20 5.50 0.50 19.23 8.00 9.52
    Stryker Corporation (NYSE:SYK) 75.14 82.14 0.305 1.49 26% 23% 9.32 10.53 -1.24 15.70 15.09 23.15
    Teva Pharmaceutical Industries (NYSE:TEVA) 40.08 53.45 0.347 2.60 28% 28% 33.36 35.09 7.63 35.18 8.44 16.52
    Thermo Fisher Scientific, Inc (NYSE:TMO) 111.35 121.22 0.150 0.49 9% 8% 8.86 9.27 2.97 23.61 0.00 na
    Zimmer Holdings, Inc. (ZMH) 93.19 99.49 0.220 0.88 15% 14% 6.76 7.47 -2.58 24.51 10.00 na
    Zoetis Inc. (NYSE:ZTS) 32.69 34.89 0.072 0.83 19% 17% 6.73 7.17 -4.94 20.09 11.54 na

    Average         2.10 37% 35% 11.10 12.59 1.08 22.04 13.34 12.46

    With the 10 Treasury at 2.39% and the sector average yield [on Q2 Divs] at 2.1% - the spread is -29 basis points.
    The cap weighted ETF XLV is up 13.60% year to date - with dividends its total return is 14.38%.
    * The change in the dividend is for the last twelve months and not year to date.

    Dates used to credit dividends:

    ABBV : 8-14-14 ABC : 06-01-14 ABT : 08-14-14 AGN: 09-04-14 AMGN: 06-06-14 AZN: 03-23-14 BAX : 09-30-14
    BAYRY: yearly BCR: 07-31-14 BDX;: 09-29-14 BMY;: 07-31-14 COV: 08-18-14 GSK: 10-01-14 JNJ: 09-08-14
    LLY : 09-09-14 MCK: 09-30-14 MDT: 07-24-14 MRK: 10-06-14 NVO: yearly NVS: 04-09-14 PFE: 09-02-14
    PRGO: 09-15-14 RHHBY: yearly STJ: 07-30-14 SYK: 10-30-14 TEVA: 09-03-14 TMO : 10-14-14 ZMH: 07-24-14
    ZTS : 09-01-14

    The Predictive Power of the Dividend/EPS Ratio on Valuations: Dividend to EPS ratios range from as low as the teens to the 80s - and may look all too random. But this ratio - during most time periods - helps explain the variety of yields and P/E ratios. There is some correlation to YTD price changes as well.

    The following stocks had Q2-14 Dividend/EPS ratios of less than 25%: ABC , AGN , BCR , MCK , PRGO , TMO , ZMH , ZTS . Their YTD mean price gain = 13.29% and 2 of the 8 beat the sector mean yearly price gain [11.1%]. Their mean yield = 0.61% and they had an average price/earnings ratio = 21.19. Their mean LTM dividend growth = 8.03% and they had an average CAGR projection of 10.01.

    The following had Q2-14 Dividend/EPS ratios of more than 25% - but less than 40%: ABT , AMGN , BAYRY , BDX , COV , MDT , STJ , SYK , TEVA . Their YTD mean price gain = 12.45% and 3 of the 9 beat the sector mean yearly price gain. Their mean yield = 1.83% - and they sold at an average price/earnings ratio = 16.96. Their mean LTM dividend growth = 21.47% and they had an average CAGR projection of 8.16.

    The following had Q2-14 Dividend/EPS ratios of more than 40% - but less than 50%: BAX , JNJ , NVO , PFE . Their YTD mean price gain = 9.39% and 2 of the 4 beat the sector mean yearly price gain. Their mean yield = 2.73% - and they sold at an average price/earnings ratio = 17.43. Their mean LTM dividend growth = 12.71% and they had an average CAGR projection of 6.55.

    The following companies had Q2-14 Dividend/EPS ratios of more than 50%: ABBV , AZN , BMY , GSK , LLY , MRK , NVS , RHHBY . Their YTD mean price gain = 8.23% and 3 of the 8 beat the sector mean yearly price gain. Their mean yield = 3.59% - and they sold at an average price/earnings ratio of 18.82. Their mean LTM dividend growth = 9.80% and they had an average CAGR projection of 3.76.

    Earnings Growth & P/E Ratios 08-22

    Fiscal and calendar years are not in sync. MCK and MDT are already in fiscal 2015.


      Earnings / Share Earn. Growth P/E Ratios 14 EPS Range
    Co. 2009 2010 2011 2012 2013 2014 2015 12-13 13-14 14-15 2013 2014 2015 High Low Range

    ABBV 0 0 0 0 314 316 388 na 0.64% 22.78% 17.58 17.47 14.23 320 310 3.16%
    ABC 167 219 251 276 314 389 437 13.77% 23.89% 12.34% 24.39 19.69 17.53 380 368 3.08%
    ABT 0 0 0 174 201 223 247 15.52% 10.95% 10.76% 20.95 18.88 17.05 229 190 17.49%
    AGN 0 0 0 414 477 580 823 15.22% 21.59% 41.90% 34.71 28.54 20.12 575 565 1.72%
    AMGN 491 521 533 651 760 840 897 16.74% 10.53% 6.79% 17.48 15.81 14.81 827 790 4.40%
    AZN 0 0 0 641 506 440 412 -21.06% -13.04% -6.36% 14.44 16.60 17.73 500 441 13.41%
    BAX 380 398 431 453 467 516 539 3.09% 10.49% 4.46% 16.07 14.54 13.92 524 491 6.40%
    BAYRY 0 0 0 688 745 798 932 8.28% 7.11% 16.79% 17.66 16.48 14.11 795 795 0.00%
    BCR 509 560 640 657 578 831 920 -12.02% 43.77% 10.71% 25.43 17.69 15.98 831 815 1.93%
    BDX 495 490 533 537 581 625 683 8.19% 7.57% 9.28% 20.13 18.72 17.13 629 622 1.12%
    BMY 0 216 228 199 182 181 174 -8.54% -0.55% -3.87% 27.57 27.72 28.84 183 168 8.29%
    COV 284 338 397 426 372 402 440 -12.68% 8.06% 9.45% 23.73 21.96 20.06 403 394 2.24%
    GSK 0 0 0 353 373 330 353 5.67% -11.53% 6.97% 12.78 14.45 13.51 363 334 8.79%
    JNJ 463 476 500 510 552 592 634 8.24% 7.25% 7.09% 18.68 17.42 16.26 606 578 4.73%
    LLY 442 474 441 339 415 278 314 22.42% -33.01% 12.95% 15.02 22.42 19.85 284 272 4.32%
    MCK 407 462 486 638 633 835 1079 -0.78% 31.91% 29.22% 30.33 22.99 17.79 1095 1045 5.99%

      Earnings / Share Earn. Growth P/E Ratios 14 EPS Range
    Co. 2009 2010 2011 2012 2013 2014 2015 12-13 13-14 14-15 2013 2014 2015 High Low Range

    MDT 292 322 337 346 375 382 405 8.38% 1.87% 6.02% 16.96 16.65 15.70 409 402 1.83%
    MRK 325 342 377 382 349 349 360 -8.64% 0.00% 3.15% 16.95 16.95 16.44 354 338 4.58%
    NVO 0 0 0 0 167 182 203 na 8.98% 11.54% 27.14 24.91 22.33 189 180 4.95%
    NVS 0 0 0 0 501 514 567 na 2.59% 10.31% 17.75 17.31 15.69 531 512 3.70%
    PFE 202 222 231 219 222 225 224 1.37% 1.35% -0.44% 13.03 12.85 12.91 230 219 4.89%
    PRGO 0 293 401 499 561 620 739 12.42% 10.52% 19.19% 26.60 24.07 20.19 626 615 1.77%
    RHHBY 0 274 279 325 384 412 444 18.15% 7.29% 7.77% 18.92 17.63 16.36 416 400 3.88%
    STJ 234 301 328 239 376 400 432 57.32% 6.38% 8.00% 17.17 16.14 14.94 402 395 1.75%
    SYK 295 333 372 407 423 477 530 3.93% 12.77% 11.11% 19.42 17.22 15.50 487 475 2.52%
    TEVA 336 454 497 535 501 494 493 -6.36% -1.40% -0.20% 10.67 10.82 10.84 507 392 23.28%
    TMO 0 0 416 494 542 694 787 9.72% 28.04% 13.40% 22.37 17.47 15.40 699 685 2.02%
    ZMH 394 433 480 530 575 605 645 8.49% 5.22% 6.61% 17.30 16.44 15.42 630 601 4.79%
    ZTS 0 0 0 108 142 154 174 31.48% 8.45% 12.99% 24.57 22.66 20.05 161 150 7.14%

    BDC Average           7.63 7.51 10.37 20.20 18.71 16.92     5.52

    Dividend History [based on Q4 Dividends]


      Dividends/Share/Quarter Percentage Dividend Growth Average
    Co. 2005 2006 2007 2008 2009 2010 2011 2012 2013 07-08 08-09 09-10 10-11 11-12 12-13 2011-13

    ABBV 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.400 na na na na na na na
    ABC 0.013 0.025 0.037 0.050 0.080 0.100 0.130 0.210 0.235 33.33 60.00 25.00 30.00 61.54 11.90 36.72
    ABT 0.132 0.141 0.156 0.173 0.192 0.211 0.230 0.244 0.140 10.90 10.98 9.90 9.00 6.09 -42.62 -18.27
    AGN 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.050 0.00 0.00 0.00 0.00 0.00 0.00 0.00
    AMGN 0.000 0.000 0.000 0.000 0.000 0.000 0.280 0.360 0.470 na na na na 28.57 30.56 29.56
    AZN 0.256 0.352 0.437 0.475 0.512 0.602 0.675 0.700 0.700 8.70 7.79 17.58 12.13 3.70 0.00 1.85
    BAX 0.145 0.145 0.218 0.260 0.290 0.310 0.335 0.450 0.490 19.27 11.54 6.90 8.06 34.33 8.89 21.61
    BAYRY 0.183 0.285 0.340 0.408 0.343 0.335 0.403 0.390 0.451 20.00 -15.83 -2.59 20.36 -3.13 15.67 6.27
    BCR 0.130 0.140 0.150 0.160 0.170 0.180 0.190 0.200 0.210 6.67 6.25 5.88 5.56 5.26 5.00 5.13
    BDX 0.215 0.245 0.285 0.330 0.370 0.410 0.450 0.495 0.495 15.79 12.12 10.81 9.76 10.00 0.00 5.00
    BMY 0.280 0.280 0.280 0.310 0.320 0.330 0.340 0.340 0.350 10.71 3.23 3.13 3.03 0.00 2.94 1.47
    COV 0.000 0.000 0.000 0.000 0.000 0.177 0.199 0.230 0.320 na na na 12.43 15.58 39.13 27.35
    GSK 0.355 0.451 0.533 0.475 0.490 0.507 0.543 0.579 0.616 -10.88 3.16 3.47 7.10 6.63 6.39 6.51
    JNJ 0.330 0.375 0.415 0.460 0.490 0.540 0.570 0.610 0.660 10.84 6.52 10.20 5.56 7.02 8.20 7.61
    LLY 0.380 0.400 0.425 0.470 0.490 0.490 0.490 0.490 0.490 10.59 4.26 0.00 0.00 0.00 0.00 0.00
    MCK 0.000 0.000 0.110 0.120 0.125 0.180 0.200 0.200 0.240 9.09 4.17 44.00 11.11 0.00 20.00 10.00
    MDT 0.000 0.000 0.000 0.000 0.000 0.225 0.243 0.260 0.280 na na na 8.00 7.00 7.69 7.34
    MRK 0.380 0.380 0.380 0.380 0.380 0.380 0.420 0.430 0.440 0.00 0.00 0.00 10.53 2.38 2.33 2.35
    NVO 0.021 0.024 0.030 0.019 0.052 0.070 0.091 0.125 0.159 -36.67 173.68 35.19 29.30 37.29 27.56 32.43
    NVS 0.223 0.223 0.270 0.366 0.430 0.500 0.588 0.615 0.632 35.56 17.49 16.28 17.64 4.56 2.85 3.70
    PFE 0.190 0.240 0.290 0.320 0.160 0.180 0.200 0.220 0.240 10.34 -50.00 12.50 11.11 10.00 9.09 9.55
    PRGO 0.043 0.045 0.050 0.055 0.063 0.070 0.080 0.090 0.090 10.00 14.55 11.11 14.29 12.50 0.00 6.25
    RHHBY 0.105 0.120 0.172 0.261 0.265 0.348 0.429 0.465 0.505 51.74 1.61 31.32 23.27 8.26 8.71 8.49
    STJ 0.000 0.000 0.000 0.000 0.000 0.000 0.210 0.230 0.250 na na na na 9.52 8.70 9.11
    SYK 0.027 0.055 0.083 0.100 0.150 0.180 0.213 0.265 0.305 21.21 50.00 20.00 18.33 24.41 15.09 19.75
    TEVA 0.064 0.079 0.101 0.117 0.158 0.193 0.219 0.257 0.326 15.84 35.04 22.15 13.47 17.35 26.85 22.10
    TMO 0.000 0.000 0.000 0.000 0.000 0.000 0.130 0.150 0.150 na na na na 15.38 0.00 7.69
    ZMH 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.180 0.200 na na na na na 11.11 na
    ZTS 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.065 na na na na na na na

    Yield + CAGR Total Return Expectations


    Company Q2-14 My Total Bonds Acc My Total Rtn Consensus Pr Impl Div
        Yield CAGR Return Rate Rate RRRs - RRR Ratings CAGR / EPS

    AbbVie Inc. ABBV 3.04% 5.00% 8.04% A 2.0 9.50 -1.46 1.8 6.46 53.16
    AmerisourceBergen Corporation ABC 1.23% 12.00% 13.23% A- 2.0 10.50 2.73 2.1 9.27 24.16
    Abbott Laboratories ABT 2.09% 9.00% 11.09% A+ 2.0 9.50 1.59 2.3 7.41 39.46
    Allergan Inc. AGN 0.12% 4.00% 4.12%   2.0 9.50 -5.38 2.0 9.38 3.45
    Amgen Inc. AMGN 1.84% 8.50% 10.34% A 1.0 9.50 0.84 2.3 7.66 29.05
    AstraZeneca PLC AZN 5.20% 2.00% 7.20% AA- 3.0 8.50 -1.30 3.0 3.30 86.36
    Baxter International Inc. BAX 2.77% 7.50% 10.27% A 2.0 9.50 0.77 2.4 6.73 40.31
    Bayer AG BAYRY 1.60% 8.00% 9.60%   2.0 9.00 0.60 1.0 7.40 26.37
    CR Bard Inc. BCR 0.57% 9.00% 9.57%   2.0 10.50 -0.93 2.8 9.93 10.11
    Becton, Dickinson and Company BDX 1.86% 8.50% 10.36%   3.0 10.50 -0.14 2.6 8.64 34.88
    Bristol-Myers Squibb Company BMY 2.87% 3.00% 5.87% A+ 1.0 9.00 -3.13 2.4 6.13 79.56
    Covidien PLC COV 1.45% 9.50% 10.95%   2.0 9.50 1.45 2.5 8.05 31.84
    GlaxoSmithKline PLC GSK 5.37% 4.50% 9.87% A+ 3.0 9.50 0.37 2.2 4.13 77.58
    Johnson & Johnson JNJ 2.72% 6.00% 8.72% AAA 2.0 8.50 0.22 2.4 5.78 47.30
    Eli Lilly and Company LLY 3.15% 0.10% 3.25% AA- 2.0 8.50 -5.25 2.4 5.35 70.50
    McKesson Corporation MCK 0.50% 12.00% 12.50% A- 2.0 10.50 2.00 1.9 10.00 11.50
    Medtronic Inc. MDT 1.92% 6.80% 8.72% AA- 2.0 8.50 0.22 1.9 6.58 31.94
    Merck & Co. Inc. MRK 2.97% 3.00% 5.97% AA 2.0 8.50 -2.53 2.4 5.53 50.43
    Novo Nordisk A/S NVO 1.83% 9.20% 11.03%   2.0 10.00 1.03 2.0 8.17 45.60
    Novartis AG NVS 3.06% 5.00% 8.06% AA- 2.0 8.50 -0.44 2.2 5.44 52.92
    Pfizer Inc. PFE 3.60% 3.50% 7.10% AA 2.0 8.50 -1.40 2.3 4.90 46.22
    Perrigo Company PLC PRGO 0.28% 11.00% 11.28%   1.0 10.00 1.28 1.9 9.72 6.77
    Roche Holding AG RHHBY 3.02% 7.50% 10.52%   2.0 9.00 1.52 1.3 5.98 53.30
    St. Jude Medical Inc. STJ 1.67% 9.10% 10.77% A 2.0 9.50 1.27 2.2 7.83 27.00
    Stryker Corporation SYK 1.49% 9.00% 10.49% A+ 2.0 9.50 0.99 2.0 8.01 25.58
    Teva Pharmaceutical Industries TEVA 2.60% 5.00% 7.60% BBB+ 3.0 10.50 -2.90 2.3 7.90 28.10
    Thermo Fisher Scientific, Inc TMO 0.49% 12.00% 12.49% BBB 2.0 11.00 1.49 1.5 10.51 8.65
    Zimmer Holdings, Inc. ZMH 0.88% 9.10% 9.98% A- 1.0 9.50 0.48 2.1 8.62 14.55
    Zoetis Inc. ZTS 0.83% 11.00% 11.83% BBB- 3.0 11.00 0.83 1.7 10.17 18.83

    Average   2.10% 7.23% 9.34%         2.13

    Disclosure: The author is long ABC, ABT, AMGN, BAX, NVO, STJ, SYK.

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