Amgen ($AMGN) is building a based after it's recent selloff. Stock has rallied above 100 day MA and is now sitting right on support. I'm adding to my position in my conservative portfolio as this one sets up well for a rally over the next year.
- Amgen has a rich pipeline potential new drugs with a heavy emphasis on cancer diagnostics.
- The current yield is 2%. In December of the last 2 years, the company raised the forward dividend by approximately 30%. The current coverage indicates that this capability is there again this year.
- Amgen was very actively buying back stock in 2011 and 2012. They significantly reduced this activity in 2013 and so far this year. With their cash generation, it is possible investors will see this shareholder friendly activity increase looking forward.
- There has been only 1 posted change in analysts estimates over the past 90 days and it was to increase the current quarter and year EPS estimate.
- The multiple on C14 earnings is below market at 14.6x
Bottom line: Conservative investment vehicle with an average yield and the potential for price appreciation on undervalued pipeline.
Disclosure: The author is long AMGN.