Current market volatility demands that investors move toward stable and income-generating investment classes. The pharmaceutical industry scores high on the stability chart because it is cushioned by events related to the ongoing economic uncertainty thanks to the inelastic nature of demand for pharma products…
So, even though fears around the COVID-19 virus have begun to abate, many pharmaceutical companies are targeting their research at cures for other diseases. Furthermore, the pharmaceutical industry traditionally keeps investors on their toes with exciting news around, for example, clinical trials, vaccine and therapy developments, and acquisitions by larger players.
Pfizer, Inc. (PFE – Get Rating), Sanofi (SNY – Get Rating), Bayer AG (BAYRY – Get Rating), and Astellas Pharma Inc. (ALPMY – Get Rating) are not just fundamentally sound but are also attractive from a valuation perspective. They are trading far below their intrinsic values. Also, they offer consistent dividends, which are crucial in the current market environment. These companies’ dividend payouts indicate that they have strong cash flows and are operationally efficient. Hence, we think these stocks represent a winning combination of value and income.
Click here to checkout our Healthcare Sector Report for 2021
Pfizer, Inc. (PFE – Get Rating)
PFE discovers, develops, manufactures, and sells healthcare products worldwide. Global Innovative Pharmaceutical (GIP); Global Vaccines, Oncology, and Consumer Healthcare (VOC); and Global Established Pharmaceutical (GEP) are the segments through which PFE operates.
PFE has been paying a quarterly dividend since 1987. On December 11, the company declared a dividend of $0.39, which cumulates to an annual dividend of $1.56 and yields 4.41%. The company’s five-year divided CAGR stands at 6.35%. Over the past six years, PFE has returned more capital to shareholders through dividend payouts than 98% of the dividend-paying U.S. stocks in the StockNews.com universe.
During the fourth quarter, ended December 31, PFE’s revenue increased 11% year-over-year to $11.7 billion, fueled by robust performances from Vyndaqel/Vyndamax, Eliquis, Oncology Biosimilars. Oncology and Rare diseases comprised the majority of PFE’s revenue for the quarter. Its EPS for the quarter was $0.10 compared to a loss per share of $0.06 posted in the same period last year.
Analysts expect PFE’s revenue for the quarter ending March 31to be $13.5 billion, representing a 12.7% year-over-year increase. Its EPS is expected to grow at the rate of 10% per annum over the next five years.
PFE has climbed 19.9% over the past year to close yesterday’s trading session at $35.61. The stock is currently undervalued. Its trailing ev/ebitda of 15.46x compares well to the industry average 20.89x.
It’s no surprise that PFE has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
PFE has a B grade for both Stability, Quality, and Value. In the B-rated, Medical – Pharmaceuticals industry, it is ranked #20 of 238 stocks.
In addition to the POWR Rating grades we’ve just highlighted, you can see the PFE ratings for Growth, Momentum, and Sentiment.
Sanofi – ADR (SNY – Get Rating)
SNY is a French pharmaceutical company that researches, develops, manufactures, and markets various therapeutic solutions. Pharmaceuticals, Vaccines, and Animal Health are the three segments through which the company operates.
SNY began paying dividends in 2003. The company declared a dividend of $1.70 per share on March 5. The dividend culminates to an annual dividend of $1.17 and a yield of 2.41%. SNY has a payout ratio of 19.6%. SNY has generated more cash flow over the 12 months than 93.8% of the U.S. dividend stocks in the stockNews.com universe.
SNY’s revenue for the fourth quarter ended December 31, 2020 declined 2.4% year-over-year to Euro 9.3 billion. However, its vaccine-related revenue rose 8% over the year to Euro 2 billion, as differentiated influenza vaccines saw strong demand and PPH grew consistently. Dupixent was the only product that witnessed strong growth during the quarter. The company also stated that it would help PFE and BioNTech to manufacture 125 million doses of their COVID-19 vaccine.
Analysts expect SNY’s revenue for the quarter ending March 31, 2021 to be $10.2 billion, representing a 3.5% year-over-year rise. Its EPS is expected to grow at the rate of 7.5% per annum over the next five years.
SNY ended yesterday’s trading session at $48.55, rising 20.8% over the past year. SNY is an appealing value stock. Its trailing ev/sales of 2.91x compares to the industry average8.74x.
Due to its bright prospects, SNY has an overall B rating, which translates to a Buy in our POWR Rating system. SNY has a Stability and Value Grade of A. In the Medical – Pharmaceuticals industry, it is ranked #28.
Click here to see the additional POWR Ratings for SNY (Growth, Sentiment, Quality, and Momentum).
Bayer AG (BAYRY – Get Rating)
BAYRY is a Germany-based life science company that operates through its Pharmaceuticals, Consumer Health, and Crop Science segments globally.
The company has been paying dividends since 2014. BAYRY has declared a cash dividend of…
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