The healthcare sector is poised for large future growth because of an ageing baby boomer generation, coupled with huge advancements in biotech coming soon. To benefit from that growth, we take a look at dividend paying healthcare stocks today.
Dividend payouts are a part of the capital management of the company and are distributed to the shareholders of the company from the portion of the company’s earnings. It is up to the company to decide how much amount to be distributed to the shareholders from the profit and how much to keep it as retained earnings. The company can decide not to go for the dividend declaration and can be used for capital investments.
Dividend yield is the better indicator as it is a ratio that tells how much the company has paid dividends each year relative to its share price.
Here are my top 10 dividend paying healthcare stocks for 2017:
GlaxoSmithKline plc (ADR)
GlaxoSmithKline plc (NYSE: GSK) has been named to be the Dividend Channel ”International S.A.F.E. 10” list, that signifies an international stock with above-average ”Dividend Rank” statistics. The stock is currently generating a good dividend yield of 5.4% (as of December 23rd, 2016; Source: Google finance), as well as has a good track record of at least five years of dividend growth, as per the most recent ”Dividend Rank” report.
GSK reported a 19p dividend during their recent their quarter of 2016 results and intends to pay 80p for FY 2016 and 2017.
Sanofi SA (ADR)
Sanofi SA (ADR)(NYSE:SNY) has one of the highest dividend yields in the healthcare sector. The dividend per share of the company is growing from the past 22 years. SNY intends to sell its generics business, which means that there will be a big inflow of cash, and will also lead to SNY stock increasingly aggressive in finding new acquisition targets. SNY stock currently generates a dividend yield of over 4.2% (as of December 23rd, 2016; Source: Google finance).
AbbVie Inc(NYSE:ABBV) in the twelve months ending September 2016 has an average Dividends Per Share growth rate of 15.00% per year. ABBV is formed by the split of two companies in October 2011 by Abbott Laboratories and got officially listed on the NYSE on January 2nd, 2013. Although the company has a shorter length to its dividend history, the former parent Abbott Laboratories had paid dividends consistently since 1924 and has increased the dividend payout for 44 consecutive years. At 4.1%, ABBV now pays a higher dividend yield than the former parent Abbott Laboratories’ 2.8% (as of December 23rd, 2016; Source: Google finance).
Pfizer Inc.(NYSE:PFE) maintains an overall yield of 3.94% (as of December 23rd, 2016; Source: Google finance), and has a dividend above that of the S&P 500. PFE assures a strong commitment to dividend growth. PFE has 94 clinical programs in progress, eight of which are for regulatory approval. In the first three-quarters of 2016, Pfizer returned over $10.5 billion to shareholders via dividends and share repurchases.
Novartis AG (ADR)
Novartis AG (ADR)(NYSE:NVS) has a dividend yield of 3.8% and when compared to the companies included in the health care sector, NVS has a higher dividend yield than the sector’s average forward dividend yield of 2.04%. Novartis reported a 4% increase in the dividend payment to CHF 2.70 per Novartis share during 2015 as compared to CHF 2.60 per share in the prior corresponding year. This is the 19th consecutive rise in the dividend paid per share since Novartis AG is formed in December 1996.
Teva Pharmaceutical Industries Ltd (ADR)
Teva Pharmaceutical Industries Ltd (ADR)(NYSE:TEVA) has a dividend yield of 3.7% at the current price (as of December 23rd, 2016; Source: Google finance). The group reported a cash dividend of $0.34 per ordinary share for the third quarter of 2016 as well as a cash dividend of $17.50 per Mandatory Convertible Preferred Share.
According to tipranks.com, 17 analysts has covered the stock while recommending a “Moderate Buy”. TEVA has an average price target of $50.15, which is a further upside of 37.89%.
AstraZeneca plc (ADR)
AstraZeneca plc (ADR)(NYSE:AZN) has a dividend yield of 5.1 percent (as of December 23rd, 2016; Source: Google finance) and has an average dividend quality score of 42 out of a possible score of 100. The group pays Dividends twice a year, while a major proportion is paid during second interim results. AZN reported a net of dividend payments of $3,561 million in this year to date (as of third quarter of 2016 results).
Merck & Co., Inc.
Merck & Co., Inc. (NYSE:MRK) took in over $2 billion in sales with vaccine products and has more than 10 new pharmaceutical products in phase III testing. Zinplava is also a new launch for Merck and just got approved by the FDA in October and will be available in Q1 2017.
The group has paid the dividend consecutively for the last 23 years and has a decent dividend yield of 3.16% (as of December 23rd, 2016; Source: Google finance). During the September quarter of 2016, Dividends Declared per Common Share rose to $0.46 from $0.45 in the prior corresponding period.
Abbott Laboratories (NYSE:ABT) dividend yield is 2.8 percent (as of December 23rd, 2016; Source: Google finance) and has a relatively good dividend quality score of 67 out of a possible score of 100 points. This shows some sustainability of its robust payout ratio and underscores its attractiveness for dividend investors seeking current income.
From 1924, Abbott stock reported dividends for 372 consecutive quarters and enhanced the dividend payout for 45 successive years. The group will be paying a dividend of $0.265 on February 15th, 2017 for investors on record on January 13th, 2017.
Gilead Sciences, Inc.
Gilead Sciences, Inc. (NASDAQ: GILD) sales are falling due to the two drugs Harvoni and Sovaldi and has experienced multiple setbacks for its pipeline. As a result, GILD stock has been under pressure and lost over 9.5% in the last three months (as of December 23rd, 2016; Source: Google finance)
However, GILD stock is available at very cheap enterprise value-to-EBITDA multiple while 16 analysts recommend a “Strong Buy” as per tipranks.com. GILD has an average price target of $98.54, which is a further upside of 33.23%. GILD stock has a dividend yield of 2.6%. For the fourth quarter of 2016, Gilead reported a cash dividend of $0.47 per share of common stock which is payable on December 29, 2016, for stockholders with record at December 15th, 2016.