Wall Street Favorite Healthcare Equities For July Topped By CVS Health

Summary

• Big pharma drug makers and biotech issues continue to top the healthcare sector by yield and broker targets. WallStars are distinguished by positive broker target price upsides.
• The Healthcare sector is composed of ten component industries. The 47 firms selected by broker target price upsides for this writing represented nine of those industries.
• Those 47 Health WallStars ranged in yield from 0.52% to 4.88%. Top ten, GILD, PMD, PFE, NVS, AZN, CAH, ABBV, PDCO, SNY and GSK, averaged 3.86%.
• Four of ten top yield Healthcare stocks made the top ten of thirty for gains. The ten top gainers averaged 18.6% in estimated 1yr. price gains.
• $5k invested in the lowest-priced five July top-yield Healthcare stocks showed 49.19% less net gain than that derived from all ten. Big Healthcare stocks ruled the sector.
• Members of my private investing community, The Dividend Dog Catcher, can follow this idea, as well as my other top picks with access to my model portfolio. Start your free trial today >>

Actionable Conclusions (1-10): Analysts Projected 12.6% To 28.5% Net Gains For Top Ten Healthcare WallStars By July 2019

Four of ten top dividend-yielding Healthcare stocks were verified as being among the top ten gainers for the coming year based on broker 1-year target prices. (They are tinted gray in the chart above). Thus, this yield-based forecast for Healthcare WallStars as graded by Wall St. proved 40% accurate.

Projections based on estimated dividend amounts from $1000 invested in the ten highest yielding stocks and the aggregate one-year analyst mean target prices for those stocks as reported by YCharts produced the 2019 data. Note: one-year target prices from one analyst were not applied (n/a). Ten probable profit-generating trades to 2019 were:

CVS Health (CVS) was projected to net $285.06 based on annual dividend plus a mean target price estimate from twenty-three analysts, less broker fees. The Beta number showed this estimate subject to volatility equal to the market as a whole.

McKesson (MCK) was projected to net $229.88, based on dividends, plus a mean target price estimate from eighteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 29% more than the market as a whole.

AbbVie (ABBV) was projected to net $209.52, based on dividends plus a mean target price estimate from twenty-three analysts, less broker fees. The Beta number showed this estimate subject to volatility 61% more than the market as a whole.

AmerisourceBergen (AB) netted $200.84 based on median target price estimates from eighteen analysts plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 4% more than the market as a whole.

Cardinal Health (CAH) was projected to net $180.26, based on a median target price estimate from eighteen analysts plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 1% more than the market as a whole.

Sanofi (SNY) was projected to net $164.74 based on dividends plus a median target estimate from four brokers, less broker fees. The Beta number showed this estimate subject to volatility 16% less than the market as a whole.

Abbott Laboratories (ABT) netted $161.83 based on median target price estimates from fifteen analysts plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 27% more than the market as a whole.

Gilead (GILD) was projected to net $153.74, based on median target price estimates from twenty-nine analysts plus dividends, less broker fees. The Beta number showed this estimate subject to volatility 12% over the market as a whole.

Allergan (AGN) was projected to net $147.35 based on dividends, plus a median target price estimate from fifteen analysts, less broker fees. The Beta number showed this estimate subject to volatility 27% more than the market as a whole.

Fresenius Medical Care (FMS) was projected to net $126.09 based on dividends, plus a mean target price estimate from five analysts, less broker fees. The Beta number showed this estimate subject to volatility 35% less than the market as a whole.

The average net gain in dividend and price was estimated at 18.6% on $10k invested as $1k in each of these ten healthcare stocks. This gain estimate was subject to average volatility 11% more than the market as a whole.

47 WallStars Represented 9 Of 10 Healthcare Industries In July

Yield (dividend/price) results from YCharts July 30 verified by Yahoo Finance for forty-seven stocks from 9 sector Industries led to the actionable conclusions in this article. Only Long-Term Care Facilities were excluded by broker reckoning.

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs."

July Healthcare WallStars By Target Upsides

July Healthcare WallStars By Yield

Actionable Conclusions (11-20) Yield Metrics Rated 10 Healthcare WallStars

Top ten Healthcare Sector WallStars selected 7/30/18 by yield represented five of ten constituent industries. Top yielding healthcare stock, GlaxoSmithKline (GSK) [1] was one of six representatives for drug manufacturers - major.

The other five drug manufacturers - major placed second, fourth, and sixth to eighth, Sanofi [2], AbbVie [4], AstraZeneca (AZN) [6], Novartis (NVS) [7], Pfizer (PFE) [8].

Two Medical Distribution industry representatives placed third, and fifth: Patterson Companies (PDCO) [3], and Cardinal Health [5].

Finally, the ninth and tenth slots were filled by a lone diagnostics & research firm, Psychemedics (PMD) [9], and a single biotechnology entity, Gilead Sciences [10], which completed the top ten July top yield Healthcare WallStars list by yield.

Actionable Conclusions: (21) Top Ten Healthcare WallStars Showed 13.34-27.54% Upsides To July 2019; (22) No Downsides Showed

To quantify top dog rankings, analyst mean price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield "dog" metrics, analyst mean price targets became another tool to dig out bargain stocks.

Analysts Forecast A 49.19% Disadvantage For 5 Highest Yield, Lowest Priced Healthcare Equities To July 2019

Ten top yield Healthcare equities were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking.

As noted above, top ten Healthcare stocks selected 7/30/18 with the highest dividend yields represented five of ten industries constituting the sector.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced of the Top Ten Highest-Yield Healthcare Equities Delivering (24) 5.01% Vs. (25) 9.87% Net Gains by All Ten by July 2019

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Healthcare equities by yield were predicted by analyst 1-year targets to deliver 49.19% less gain than $5,000 invested as $.5k in all ten. The highest priced Healthcare top yield selection, AbbVie, was projected to deliver the best net gain of 20.95%.

The five lowest-priced Healthcare top yield stocks for July were: Psychemedics; Patterson Companies; AstraZeneca; Pfizer; GlaxoSmithKline, with prices ranging from $20.88 to $41.08.

Five higher-priced Healthcare stocks for July were: Sanofi; Cardinal Health; GlaxoSmithKline; Gilead Sciences; Novartis; AbbVie, whose prices ranged from $42.93 to $91.45.

The distinction between five low-priced dividend equities and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added 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. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.

See my instablog for specific instructions about how to best apply the dividend dog data featured in this article, this glossary instablog to interpret my abbreviated headings, and this instablog to aid your safe investing. - Fredrik Arnold

The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your Healthcare dog stock purchase or sale research process. These were not recommendations.

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.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by Thomson/First Call in Yahoo Finance. Dog photo: wallstreetotc.com

Analyst’s Disclosure: I am/we are long PFE, MFCSF. 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.