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Health Care / Pharma 1/12/16 Stat Update

EPS projection and target stats were updated this morning. (The 2017 projections that come from Nasdaq have not been updated since November of 2015.) One can see the influence of the MCK news on ABC, CAH and MCK in the data. Eli Lilly provided lower than expected 2015 and 2016 guidance on January 5th - and that is also reflected in the data.

Health Care / Pharma Stocks 1-13-16

Yield in the spreadsheet below is based on the Q4-15 dividend. Spreadsheet header abbreviations: Div = dividend; EPS = earnings per share; LTM = last twelve months; YTD = year to date. The dividend to EPS ratio is a measure of dividend safety. At this point in time, companies that pay dividends once per year have had their payouts divided by four and encoded in this data as if they paid a quarterly dividend. AZN pays two unidentical dividends per year. I take the sum of those dividends and divide by four to get a run rate dividend per quarter. The last four columns measure the percentage change in the 2015 EPS projection; the change in the price target since the beginning of the year; the change in the dividend since Q2-14; and the average yearly change in the dividend since Q2-12. BAX spun off its biopharmaceuticals business to form Baxalta (BXLT), while maintaining a 19.5% interest in BXLT. Each BAX share received one BXLT share. BXLT began trading on 7-01-15 at $32.88 while BAX went from a $69.93 close to a $37.55 open. This is treated as a 1.841 to one stock split - which would imply a $37.98 open. All historical prices and EPS numbers were divided by 1.841. The dividend went from $0.52 to $0.28246. 2015 EPS went from $3.95 to $1.33 - to $1.32 on 9-30-15 (which still looks wrong compared to the $1.13 annual dividend - the prior div/EPS ratio was 53%). The 2016 EPS went from $4.06 to $1.43 while BXLT began at $1.97 - and it is now $2.03. BAX went from an unadjusted $4.90/share 2014 EPS to an adjusted $2.66. And that is still almost twice the 2015 projection. In summation, the BAX numbers are flakey. That transaction may explain the lack of LTM dividend growth for BAX. AZN had a two for one stock split on 7-27-15 - and that change is not yet reflected in the data. ABT has raised its Q1-16 div to $0.26/share/quarter. SYK has raised its Q1-16 div to $0.38/share. AMGN has raised its Q1-16 div to $1.00/share. PFE has increased its Q1-16 div to $0.30/share. BDX, BMY, LLY, MRK, NVO, NVS, PRGO, STJ, ZBH and ZTS are candidates for further Q1-16 dividend increases.


    Div Current Div/ Div/ Percent Change
Company and ticker Price /Quarter Yield EPS15 EPS16 Price Pr+Div EPS15 Target Div 1yr Div 3yr

Agilent Technologies (NYSE:A) 38.19 0.115 1.20 27.1% 24.2% -8.66 -8.66 0.00 2.35 15.00 10.32
AbbVie Inc. (NYSE:ABBV) 54.84 0.510 3.72 47.6% 40.7% -7.43 -7.43 0.00 0.37 4.08 8.86
AmerisourceBergen Corporation (NYSE:ABC) 94.81 0.340 1.43 27.4% 23.3% -8.58 -8.58 0.00 1.28 17.24 17.52
Abbott Laboratories (NYSE:ABT) 41.46 0.260 2.51 48.1% 40.5% -7.68 -7.68 -0.42 0.18 8.33 24.86
Amgen Inc. (NASDAQ:AMGN) 150.79 1.000 2.65 39.8% 29.7% -7.11 -7.11 0.00 -2.19 26.58 28.63
AstraZeneca PLC (NYSE:AZN) 63.40 0.700 4.42 66.0% 67.3% -6.63 -6.63 0.00 3.34 0.00 0.00
Baxter International Inc. (NYSE:BAX) 35.48 0.282 3.18 89.7% 79.0% -7.00 -6.26 0.00 -1.39 0.00 5.00
Bayer AG (OTCPK:BAYRY) 114.12 0.638 2.24 34.0% 31.6% -8.58 -8.58 0.12 0.00 0.00 16.12
CR Bard Inc. (NYSE:BCR) 178.91 0.240 0.54 10.6% 9.7% -5.56 -5.56 0.00 0.14 9.09 6.28
Becton, Dickinson and Company (NYSE:BDX) 142.45 0.600 1.68 33.8% 28.5% -7.55 -7.55 0.12 0.64 0.00 6.73
Bristol-Myers Squibb Company (NYSE:BMY) 63.44 0.370 2.33 77.5% 64.6% -7.78 -7.78 0.00 0.27 0.00 1.88
Cardinal Health, Inc. (NYSE:CAH) 79.89 0.387 1.94 35.3% 29.2% -10.51 -10.07 0.00 1.32 12.83 12.07
Quest Diagnostics (NYSE:DGX) 68.24 0.380 2.23 31.9% 29.9% -4.08 -4.08 0.00 1.72 15.15 8.38
Gilead Sciences Inc. (NASDAQ:GILD) 97.10 0.430 1.77 14.1% 14.3% -4.04 -4.04 0.42 -0.70 0.00 na
GlaxoSmithKline PLC (NYSE:GSK) 39.45 0.592 6.00 101.2% 92.9% -2.23 -2.23 -0.78 0.00 -14.82 -4.43
Johnson & Johnson (NYSE:JNJ) 98.24 0.750 3.05 48.5% 46.9% -4.36 -4.36 -0.16 0.19 7.14 7.13
Eli Lilly and Company (NYSE:LLY) 80.40 0.500 2.49 58.1% 56.3% -4.58 -4.58 -3.27 -0.25 0.00 0.68
McKesson Corporation (NYSE:MCK) 164.01 0.280 0.68 8.7% 7.8% -16.84 -16.70 -0.76 -1.70 16.67 12.22
Medtronic Inc. (NYSE:MDT) 76.44 0.380 1.99 35.5% 34.7% -0.62 -0.13 0.00 0.21 24.59 13.74
Merck & Co. Inc. (NYSE:MRK) 51.76 0.450 3.48 50.4% 48.0% -2.01 -1.15 0.00 0.00 0.00 1.53
Novo Nordisk A/S (NYSE:NVO) 55.43 0.190 1.37 38.2% 33.6% -4.56 -4.56 0.00 0.00 0.00 7.30
Novartis AG (NYSE:NVS) 82.24 0.704 3.43 55.9% 53.2% -4.42 -4.42 0.00 0.00 0.00 3.69
Pfizer Inc. (NYSE:PFE) 31.00 0.300 3.87 55.0% 47.5% -3.97 -3.97 0.00 0.30 7.14 7.72
Perrigo Company PLC (NASDAQ:PRGO) 146.57 0.125 0.34 6.5% 5.2% 1.29 1.29 0.21 0.00 0.00 11.90
Roche Holding AG (OTCQX:RHHBY) 33.18 0.271 3.27 60.9% 55.6% -3.74 -3.74 0.00 0.00 0.00 5.62
Sanofi (NYSE:SNY) 40.49 0.402 3.97 50.9% 52.0% -5.06 -5.06 0.00 0.00 0.00 -4.41
St. Jude Medical Inc. (NYSE:STJ) 59.19 0.290 1.96 29.5% 27.5% -4.18 -4.18 -0.71 -0.99 0.00 5.14
Stryker Corporation (NYSE:SYK) 88.73 0.380 1.71 29.7% 27.1% -4.53 -4.53 0.00 -0.61 10.14 12.78
Teva Pharmaceutical Industries (NYSE:TEVA) 64.40 0.340 2.11 25.0% 23.2% -1.89 -1.89 0.17 0.00 -0.00 3.15
Thermo Fisher Scientific, Inc (NYSE:TMO) 136.97 0.150 0.44 8.1% 7.3% -3.44 -3.44 -0.12 2.49 0.00 0.00
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) 102.87 0.220 0.86 12.8% 11.3% 0.27 0.49 0.00 -0.50 0.00 3.33
Zoetis Inc. (NYSE:ZTS) 44.97 0.083 0.73 19.1% 17.1% -6.16 -6.16 0.00 0.00 0.00 8.44

Average       2.30 39.9% 36.7% -5.38 -5.29 -0.16 0.20 4.97 7.81

With the 10 Treasury at 2.08% and the sector average yield on Q1-16 dividends at 2.30% - the spread is 22 basis points.
The cap weighted ETF XLV is up -5.50% year to date - with dividends included, its total return is -5.50%.
The yield on the XLV is 1.45% using the sum of LTM dividends - while LTM dividend growth is 11.61%.

Earnings Growth & P/E Ratios 01-13

Fiscal and calendar years are not in sync. ABC, BDX, CAH, MCK, MDT and PRGO began fiscal 2015 at least one quarter earlier than calendar 2015. Several stocks sell at valuations based on their drug pipelines - and short-term growth in EPS fails to capture a growth picture which is expected to come in 2016 and beyond. BMY is a good example. 2017 EPS projection along with the 2016 projections for GSK and NVO are from NASDAQ. The rest of the projections are from Yahoo Finance.


  Earnings / Share Earn. Growth P/E Ratios 15 EPS Range
Co. 2011 2012 2013 2014 2015 2016 2017 13-14 14-15 15-16 2014 2015 2016 High Low Range

A 295 312 288 304 170 190 219 5.56% -44.08% 11.76% 12.56 22.46 20.10 194 187 4.12%
ABBV 0 0 314 332 429 501 601 5.73% 29.22% 16.78% 16.52 12.78 10.95 518 469 11.42%
ABC 251 276 314 397 497 583 660 26.43% 25.19% 17.30% 23.88 19.08 16.26 588 578 2.01%
ABT 0 174 201 228 216 237 269 13.43% -5.26% 9.72% 18.18 19.19 17.49 246 228 8.33%
AMGN 533 651 760 870 1006 1065 1238 14.47% 15.63% 5.86% 17.33 14.99 14.16 1122 1036 8.55%
AZN 733 641 506 428 424 416 362 -15.42% -0.93% -1.89% 14.81 14.95 15.24 428 392 8.49%
BAX 234 246 254 266 126 143 140 4.72% -52.63% 13.49% 13.34 28.16 24.81 157 129 22.22%
BAYRY 0 688 745 799 751 807 na 7.25% -6.01% 7.46% 14.28 15.20 14.14 814 798 2.13%
BCR 640 657 578 840 906 990 1114 45.33% 7.86% 9.27% 21.30 19.75 18.07 1007 963 4.86%
BDX 533 537 581 625 711 841 932 7.57% 13.76% 18.28% 22.79 20.04 16.94 850 830 2.81%
BMY 228 199 182 185 191 229 303 1.65% 3.24% 19.90% 34.29 33.21 27.70 264 205 30.89%
CAH 267 321 373 384 438 530 600 2.95% 14.06% 21.00% 20.80 18.24 15.07 540 525 3.42%
DGX 285 392 400 410 476 508 533 2.50% 16.10% 6.72% 16.64 14.34 13.43 520 470 10.50%
GILD 181 171 201 809 1219 1206 na 302.49% 50.68% -1.07% 12.00 7.97 8.05 1509 1079 35.27%
GSK 325 353 373 296 234 255 288 -20.64% -20.95% 8.97% 13.33 16.86 15.47 275 242 14.10%
JNJ 500 510 552 597 618 640 678 8.15% 3.52% 3.56% 16.46 15.90 15.35 654 622 5.18%

  Earnings / Share Earn. Growth P/E Ratios 15 EPS Range
Co. 2011 2012 2013 2014 2015 2016 2017 13-14 14-15 15-16 2014 2015 2016 High Low Range

LLY 441 339 415 278 344 355 416 -33.01% 23.74% 3.20% 28.92 23.37 22.65 386 341 13.08%
MCK 486 638 633 835 1282 1433 1450 31.91% 53.53% 11.78% 19.64 12.79 11.45 1465 1420 3.51%
MDT 337 346 375 382 428 438 485 1.87% 12.04% 2.34% 20.01 17.86 17.45 450 432 4.21%
MRK 377 382 349 349 357 375 389 0.00% 2.29% 5.04% 14.83 14.50 13.80 401 357 12.32%
NVO 102 142 167 162 199 226 257 -2.99% 22.84% 13.57% 34.22 27.85 24.53 229 222 3.52%
NVS 378 389 501 523 504 529 608 4.39% -3.63% 4.96% 15.72 16.32 15.55 560 493 13.29%
PFE 231 219 222 226 218 236 263 1.80% -3.54% 8.26% 13.72 14.22 13.14 247 229 8.26%
PRGO 401 499 561 639 774 960 na 13.90% 21.13% 24.03% 22.94 18.94 15.27 1000 911 11.50%
RHHBY 140 162 156 156 178 195 na 0.00% 14.10% 9.55% 21.27 18.64 17.02 201 188 7.30%
SNY 348 319 340 345 316 309 356 1.47% -8.41% -2.22% 11.74 12.81 13.10 311 306 1.58%
STJ 328 239 376 398 393 422 478 5.85% -1.26% 7.38% 14.87 15.06 14.03 441 407 8.65%
SYK 372 407 423 473 511 560 609 11.82% 8.03% 9.59% 18.76 17.36 15.84 595 545 9.78%
TEVA 497 535 501 507 543 585 574 1.20% 7.10% 7.73% 12.70 11.86 11.01 655 542 20.81%
TMO 416 494 542 696 738 820 904 28.41% 6.03% 11.11% 19.68 18.56 16.70 854 799 7.45%
ZBH 480 530 575 606 689 781 865 5.39% 13.70% 13.35% 16.98 14.93 13.17 793 730 9.14%
ZTS 0 108 142 153 173 193 230 7.75% 13.07% 11.56% 29.39 25.99 23.30 198 185 7.51%

Sector Average           15.37% 7.19% 9.64% 18.87 17.94 16.29     15.96

Disclosure: I am/we are long ABC, ABT, AMGN, GILD, NVO, STJ, SYK.