The COVID-19 pandemic has accelerated drug manufacturing companies’ revenues this year. Overall pharmaceutical sales are expected to increase by 4.6% next year. In addition…
with the emergence of the omicron coronavirus variant, the demand for vaccines and other precautionary medicines should remain high.
Several trends in the pharmaceutical manufacturing industry, such as the addition of e-pharmacy, AI partners, and biosimilar market expansion, are expected to drive the drug manufacturing market next year. Also, as drug manufacturers tend to raise the prices of their medications every year, their revenues should increase next year.
Given this backdrop, along with rising inflation and expected market volatility due to omicron variant concerns, we think it could be wise to bet on dividend-paying drug manufacturing stocks Novo Nordisk A/S (NVO – Get Rating), Novartis AG (NVS – Get Rating), Merck & Co., Inc. (MRK – Get Rating), and Bristol-Myers Squibb Company (BMY – Get Rating).
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Novo Nordisk A/S (NVO – Get Rating)
Headquartered in Bagsvaerd, Denmark, NVO is a global health company that operates in two segments—Diabetes and Obesity care; and Biopharm. NovoLog/NovoRapid, NovoLog Mix/NovoMix, Norditropin, and Vagifem are a few of the company’s products. NVO markets its products in more than 180 countries, and its regional structure consists of two commercial units: North America and International Operations.
The company paid a $0.55 semiannual dividend on August 25. NVO’s annual $1.10 dividend yields 0.99% at its current price. Its dividend has grown 0.9% over the past five years.
This month, NVO planned to invest more than DKK17 billion ($2.59 billion) to construct three new manufacturing facilities and expand one existing facility at its production site in Kalundborg, Denmark. The company believes that the investment will establish additional capacity across the entire global value chain, from manufacturing active pharmaceutical ingredients (API) to assembly and packaging.
NVO’s net sales for the third quarter, ended September 30, 2021, increased 15.2% year-over-year to DKK35.62 billion ($5.42 billion). The company’s gross profit grew 14.7% from its year-ago value to DKK29.56 billion ($4.5 billion). Its operating profit rose 19.1% from the prior-year quarter to DKK15.25 billion ($2.32 billion). Also, the company’s net profit increased 17.7% year-over-year to DKK12.12 billion ($1.84 billion).
Analysts expect NVO’s revenue for its fiscal year 2022 to be $22.82 billion, representing a 6.5% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 10.8% in the current year. Its stock price has increased 64.7% over the past nine months.
NVO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an A grade for Quality and a B grade for Stability and Value. We have also graded NVO for Sentiment, Growth, and Momentum. Click here to access all NVO’s ratings. NVO is ranked #7 of 193 stocks in the Medical – Pharmaceuticals industry.
Novartis AG (NVS – Get Rating)
NVS is a pharmaceutical company headquartered in Basel, Switzerland. The company operates through two segments: Innovative Medicines; and Sandoz. NVS’ segments provide ophthalmology, neuroscience, immunology, cardiovascular, and other medical products. Also, it offers active ingredients and finished dosage forms of small molecule pharmaceuticals to third parties across a range of therapeutic areas.
NVS paid a $3.2 annual dividend on March 15. The stock distributes a $3.20 dividend annually, which translates to a yield of 3.65%. The company’s dividend has grown at a rate of 3.3% over the past five years.
This month, the U.S. Food and Drug Administration (FDA) has approved NVS’ Cosentyx for the treatment of active enthesitis-related arthritis (ERA) in individuals four years and older, and of active juvenile psoriatic arthritis (JPsA) in patients two years and older. NVS believes that this approval should bring positive news for some patients who struggle with painful symptoms like the inflammation of the joints and swollen fingers and toes.
During the third quarter…
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