The 4 Best Pharmaceutical Stocks For Income Investors By StreetAuthority. Pharmaceutical stocks tend to be more recession-resistant because of steady demand for prescription medicines, which is growing 5% a year due to an aging population in developed countries and rising health care spending in emerging markets such as India and China. The bigger drug companies generate lots of cash flow, steady dividend growth and carry healthy dividend yields.
The main hurdle facing pharmaceutical stocks right now is patent expirations on some big-name prescription drugs. Investors worry these companies won't be able to turn out new drugs quickly enough to maintain high margins. However, many of these expirations are years away. In the meantime, the big pharmaceutical companies are stepping up merger activity, particularly in the biotech sector, and acquiring new blockbuster drugs. Also, even if some medicines lose patent protection, the larger drug companies would still have many other products that generate billions of dollars in sales, and plenty of cash to cover future dividend payments.
Here are the pharmaceutical shares with dividend yield figures:
Johnson & Johnson (NYSE:JNJ)
Yield: 3.4%
Novartis AG (NYSE: NVS)
Yield: 3.2%
Pfizer Inc. (NYSE: PFE)
Yield: 4.0%
Abbot Laboratories (NYSE: ABT)
Yield: 3.6%
Related Stock Ticker:
JNJ, NVS, PFE, ABT
Source: istockanalyst
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