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Amgen: One Of The Best Dividend Growth Stocks In The Market Has Gone On Sale

Feb. 11, 2019 5:17 AM ETAmgen Inc. (AMGN)35 Comments


  • Amgen's shares yield more than 3% and offer some of the best dividend growth metrics in the market.
  • Over the long term, this stock's performance has crushed the broader market's.
  • Growth appears to be slowing at AMGN, but the company has ~$30B to put to use to bolster the pipeline/spark future growth.

It’s relatively rare for high quality, best in breed type dividend growth stocks to go on sale. As a DG investor who pays a lot of attention to value, these are the situations that I find myself sitting around, waiting to take advantage of. So, what if I told you that one of (if not the best) dividend growth stocks of all time has recently been discounted by the market? You’d be excited right? You might even say that sort of opportunity is too good to be true. Well, it’s not. Amgen (NASDAQ:AMGN) has sold off roughly 10% during the last month and presents dividend growth investors with a potentially very attractive long-term opportunity.

Some might be surprised to see me calling Amgen one of the best dividend growth stocks of all time. Oftentimes, I think, when DGIs think about healthcare/bio-tech/big pharma names, companies like Johnson and Johnson (JNJ), Abbot Laboratories (ABT), Medtronic (MDT), or even a behemoth like Pfizer (PFE) comes to mind. Names like these might have much longer dividend growth stories than Amgen, but they aren’t nearly as impressive (specifically when looking at the “growth” aspect of dividend growth). Furthermore, when you factor in the capital gains that Amgen has provided alongside its fantastic dividend growth, AMGN's shares become really tough to beat.

But, you don’t have to take my word for it. Let’s take a look at some long-term data.

Over the last 20 years, AMGN's shares have produced a total annualized rate of return of 10.8%. This might not seem overly impressive, but it’s important to acknowledge that this data begins with a purchase made on 12/31/1998, meaning that AMGN's shares have produced a double-digit annualized ROR throughout a period of time that includes two major recessions.

During the same period of time, the S&P 500’s

This article was written by

Nicholas Ward profile picture
Maximize your income with the world’s highest-quality dividend investments

University of Virginia, class of 2011 B.A English

Senior Investment Analyst at Wide Moat Research.

Contributor for Safe High Yield, The Dividend Kings, iREIT, and The Forbes Real Estate Investor.

I am also the former  editor-in-chief and portfolio manager at The Intelligent Dividend Investor.  

Check out my youtube channel for other investing ideas: https://www.youtube.com/channel/UCP7AhF_TqJSE7fN7CFwxKlg?view_as=subscriber

Ranked #18 overall blogger by TipRanks for 2014.

Former contributor at TheStreet.com (where I cover stocks held in Jim Cramer's Action Alert PLUS Charitable Trust Portfolio), Investing Daily, and Sure Dividend.

Former Editor-in-Chief of The Dividend Growth Club and The Income Minded Millennial.

I am a young investor focused primarily on dividend growth stocks. Seeking Alpha, and more specifically, the dividend and income community that exists here, has played a significant role in my development as a portfolio manager. I am not a professional, though I do manage my family's finances. I enjoy the process; the research, the decision making, the strategic planning...and not paying a financial adviser to do the work for me.

I've built what I believe to be a conservative, diverse, and balanced dividend growth portfolio currently consisting of ~60 positions. At the end of every month I break down the portfolio in my Nicholas Ward's Dividend Growth Portfolio Updates.

Thus far, I've been able to meet by goals from income, income growth, and capital appreciation standpoints. I use a wide variety of metrics, both fundamental and technical, when establishing fair value when doing my due diligence on an individual company. All of my methods are discussed in my work here.

I hope this work inspires debate, conversation, and education - this is why I write for Seeking Alpha, to give back to the community that has helped me so much and to hopefully contribute, in some way...even if its by posing a question, to the growth of others.

*I should note that all articles that I write here are done so for my personal informational/educational purposes only. Any purchases that I make or opinions that I express are not meant as recommendations for anyone else. Please perform your own due diligence before following my lead into or out of a position. I am not a professional. I am not a financial adviser of any sort.  I enjoy investing and the open discussion that articles on this site inspire - this is why I write, not to influence anyone else's decisions, but to enhance my own ability to make sound financial choices. That being said, I wish the best of luck to everyone. May we all meet our own financial goals.

Analyst’s Disclosure: I am/we are long AMGN, JNJ, BMY, PFE, MDT. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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