luza studios/E+ via Getty Images
Royalty Pharma (NAS: NASDAQ:RPRX) is a cash flow positive company that pays a 1.69% dividend yield that is higher than S&P 500's 1.3%. It is led by the founder Pablo Legorreta, who has over 20 years of experience
Royalty Pharma: A Pharma-Like Company Without The Same Risks
Summary
- The founder-led business is a profitable, cash flow positive business that is trading at a slight discount now.
- Six quarters after its IPO, the company has demonstrated a strong record of meeting/beating analysts' revenue and earnings estimates.
- The company's greatest asset is the management team with their depth and breadth of industry knowledge.
- The business model of investing into drugs in late-stage clinical trials, already approved therapies, and through M&As bears less risk compared to a traditional pharmaceutical company.
- The company is committed to rewarding their shareholders through dividends that have grown 13% YoY.
I am a conservative yet opportunistic value investor who has been investing since 2005. I am fact-driven, preferring to let financial data inform me of a company's health, followed by qualitative analysis to fill in the gaps to paint a holistic picture of a company's growth prospects.My work is published on two platforms, Seeking Alpha and FAST Graphs (https://fastgraphs.com/blog/category/research-articles/).I appreciate everyone who reads my research and especially those who drop me questions and comments and follow me on Seeking Alpha. If you would like to engage in further discussions, you can either message me directly in Seeking Alpha, or on Twitter (https://twitter.com/jamessciteacher).
Analyst’s Disclosure:I/we have a beneficial long position in the shares of RPRX either through stock ownership, options, or other derivatives. 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.
I do not have any plans to accumulate more shares within the next 72 hours.
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.