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Gilead: A Hold Despite Cancer Advance, Remdesivir, Dividend

Mar. 11, 2021 3:13 AM ETGilead Sciences, Inc. (GILD)11 Comments
William Meyers profile picture
William Meyers


  • The Veklury (remdesivir) bolus will resemble the prior Hepatitis C bolus.
  • Gilead's pipeline is promising, but past failures cast doubts.
  • The dividend is solid, that is the main attraction.

Gilead Sciences (NASDAQ:GILD) is a large-cap, long-lived, biotechnology pharmaceutical company with a broad array of commercial therapies plus a broad pipeline. In Q4 2020, Veklury provided a boost, which should continue until at least Q2 2021. An antiviral used to fight COVID-19 infections, at some point sales will taper off drastically, at least in nations where immunizations knock the pandemic back.

This resembles the situation a decade ago when Gilead introduced its Hepatitis C treatments. That produced a revenue and stock price spike, followed by a long, if slow, down trend. I think there is a lot of promise in the Gilead potential product pipeline, but failures in that pipeline over the last few years have made investors cautious. I have long owned Gilead and continue to reap the dividend. I believe that holding is the best strategy, as the stock price could also capture positive news from the pipeline.

Because Gilead is a large, complex company, this article will focus on a few features that are currently central to my thesis. After briefly reviewing Q4 2020 results I will look at recently revealed Biktarvy and Yescarta data and two of my favorite pipeline therapies. I will also summarize why investors feel burned by past pipeline failures, which is the main reason I think we could be undervaluing the company.

ChartData by YCharts

Q4 2020 Results and the Dividend

Gilead Sciences Q4 2020 revenue was $7.42 billion, up 26% from $5.88 billion in Q4 2019. GAAP EPS was $1.23, down from $2.12 year-earlier. Non-GAAP income was $2.19, up from $1.10 year-earlier. The reason GAAP and non-GAAP numbers essentially switched places in the course of a year is largely related to accounting for acquisitions. The dividend is currently $0.71 per quarter, so whether compared to the GAAP or non-GAAP Q4 numbers, clearly it is well-covered by earnings. The yield at the closing stock price of $64.33 on March 9, 2021 was

This article was written by

William Meyers profile picture
I provided stock and bond research and analysis to a small cap specialist investor, Lloyd Miller, from 2002 until his death in January 2018. For my own account I invest mainly in technology and biotechnology stocks. My technology and investment web site is openicon.com, where readers can view the notes I take to make decisions and to write articles for Seeking Alpha.

Analyst’s Disclosure: I am/we are long GILD. 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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