You know what costs about $5? A Powerball ticket and shares of Celldex Therapeutics, Inc.
In fact, you can buy nearly two shares of CLDX for a Lincoln. And that highlights another relationship as well. For many investors, the biotech sector is much like playing the lotto. It’s a vast sea of early stage development companies, betting their futures on just one drug. To say the sector is risky would be an understatement.
But like most sectors, stereotypes based on previous histories rule the underlying narrative in the biotechs.
Believe it or not, you can actually score some decent dividend yields in the sector. For every CLDX, there’s a biotech elder statesmen just minting cash flows from its portfolio of advanced drugs. For investors, you can have your growth and dividends at the same time.
Volatility, Thy Name Be IBB
Along with its sister defensive sectors – such as consumer staples and utilities – healthcare stocks are often viewed as a boring and stable portfolio element. Just look at giant Johnson & Johnson (JNJ ). After all, in times of duress, consumers will still go to the doctor and take their medicine. That recession-resistant nature provides for steady earnings growth, hefty cash flows and larger-than-average dividends. Those attributes are exactly what many dividend investors are looking for.