Dividend.com has added an international pharmaceutical giant to the Best Dividend Stocks List and removed an industrial basic materials company from the list.
One of the biggest trends for the long haul happens to be rising healthcare demand. On the one hand, our rapidly aging population is requiring more therapies to keep us going for longer. On the other, rising incomes in emerging markets and other nations are allowing people to tap into new healthcare solutions for the first time. The combination of these two pieces is creating one heck of a bullish tailwind for the healthcare sector.
This is all wonderful news for our latest Best Dividend Stocks List pick.
As one of the largest pharmaceutical firms on the planet, our new pick has been designing new drugs and therapies for decades. This includes several cash-minting blockbuster drugs throughout its history. Those drugs have continued to power the firm’s dividend growth and robust buyback program. It managed to hand out more than $1.5 billion to shareholders during the first quarter alone. Meanwhile, a very full-bodied pipeline program – with exposure to new biotech and cancer-fighting medicines – should continue to provide our pick with plenty of cash flows and earnings power into the future. The ability to buy promising rivals – thanks to its massive size – doesn’t hurt either.
In the end, the prognosis for our new pick is certainly healthy. Its current and future portfolio will continue to throw off plenty of cash flows and help pad its already juicy dividend. For dividend investors, our new pick offers plenty of opportunity.
To summarize, here are five reasons why you should own this stock:
- One of the world’s largest pharmaceuticals with clinical operations conducted in more than 55 countries.
- Features a robust portfolio of drugs – currently numbering over 30 as well as a few blockbuster franchises.
- Recorded revenues of more than $20 billion last year – a 7% increase over the previous year’s number.
- Recently increased quarterly dividend by more than 8% and, thanks to the new tax law, the company is likely to repatriate close to $9 billion in overseas earnings.
- Healthy payout ratio of 43% and increasing yield of 2.65%.
Removal of a Basic Materials From the Best Dividend Stocks List
Sometimes you can have too much of a good thing. And that’s the case with our list’s pick in basic materials. After providing a total return of nearly 30% since making our list in June of 2016, the stock has become quite frothy. A rising economy has made it a top choice for investors. That creates a problem as the firm is now expensive when looking at forward P/E ratio. With its valuation well above of our DARS model’s thresholds, its dividend uptrend score has suffered. With that bringing down its overall DARS score, we have been forced to remove it from our list. However, this is once again a situation where underlying fundamentals are still good and continue to support its dividend. For income seekers, our former pick still has plenty value left.
Find out here which international energy firm was added to the Best Dividend Stocks List last week.
