Healthcare: 9.6% More Net Gains From 5 Highest Yield, Lowest Priced July 29 Dogs

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Includes: AZN, BAX, GSK, INVA, MRK, PDLI, PETS, PFE, SNY, VIVO
by: Fredrik Arnold

Summary

$5k invested in the lowest priced five of ten top yield healthcare sector dividend dogs showed 9.6% higher net gain than from $5k invested in all ten.

Annual dividends divided by closing stock prices as of July 29 determined yields. Analyst net targets were employed to calculate gains one year out.

The five lowest priced high yield healthcare stocks were: PDLI, THRX, PETS, VIVO and AZN.

Five higher priced stocks completing the ten top high yield healthcare group were: PFE, BAX, GSK, SNY and MRK.

Consider these stocks as reference points for your July/August healthcare stock investment investigation.

Top Ten For the Money

This article refined and distinguished an earlier report that revealed Small, Mid, and Large cap healthcare bargain stocks to buy and hold one year. Small cap firms were valued at $200M(illion) to $2B(illion); Mid cap firms were worth $2B to $10B; and Large caps were valued above $10B.

See Dow 30 article for an explanation of the term "dogs" for stocks reported based on Michael B. O'Higgins' book "Beating The Dow" (HarperCollins, 1991), now named Dogs of the Dow. O'Higgins' system works to find bargains in any collection of dividend paying stocks. Utilizing analyst price upside estimates expanded the stock universe to include popular growth equities, as desired.

Dog Metrics Extracted Bargains

Ten small, mid, and large cap healthcare equities were culled by yield from here. Yield (dividend/price) results verified by Yahoo Finance did the ranking.

Actionable Conclusions: (1) Analysts Assert 5 Lowest Priced of Top Ten Highest Yield

Healthcare Dividend Dogs Generate 1041% Vs. (2) 9.5% Net Gains by All Ten by July 29, 2016

$5,000 invested as $1k in each of the five lowest priced stocks of the top ten healthcare dividend kennel by yield were predicted by analyst 1-year targets to deliver 9.6% more net gain than $5,000 invested as $0.5k in all ten. The lowest priced healthcare dividend dog, PDL BioPharma, Inc. (NASDAQ:PDLI), was projected to deliver the best net gain of 27.47%.

Lowest priced five healthcare dividend dogs for July 29 were: PDL BioPharma, Inc.; Theravance Inc. (THRX); PetMed Express Inc. (NASDAQ:PETS); Meridian Bioscience, Inc. (NASDAQ:VIVO); and AstraZeneca (NYSE:AZN), with prices ranging from $5.87 to $33.01.

Higher priced five healthcare dividend dogs for July 29 were: Pfizer (NYSE:PFE); Baxter International (NYSE:BAX); GlaxoSmithKline (NYSE:GSK); Sanofi (NYSE:SNY); and Merck & Co. (NYSE:MRK), whose prices ranged from $35.76 to $58.54.

This distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The added scale of projected gains based on analyst targets contributed a unique element of "market sentiment" gauging upside potential. It provided a here and now equivalent of waiting a year to find out what might happen in the market. It's also the work analysts got paid big bucks to do. A caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.

The stocks listed above were suggested only as reference points for a small, mid, and large cap healthcare equities dog dividend stock investment research process in July/August, 2015. These were not recommendations.

Gains/declines as reported did not factor-in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.dividend.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance.

Disclosure: I am/we are long PFE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.