Sometimes even the potential of the most successful firm is hindered by outside influences. This has been the case for one of our Best Dividend Stocks List picks in the healthcare sector. Despite the long-term great prognosis for rising healthcare demand and spending, our pick has spent much of the last few years fighting plenty of lawsuits, which has kept a lid on its share prices. This is despite the firm’s continued earnings progress, rising revenues and a strong dividend profile.
But, we may begin to see some significant gains, and our pick’s share price may finally match its dividend growth.
Thanks to a few key lawsuit wins, settlements and decision turnovers, our pick is quickly moving its legal burden off its back. This will only help strengthen its cash flows and boost its overall potential.
As our pick has continued to churn out new medicines and medical devices, it has already become one of the largest biotech firms in the world, with a robust pipeline of drugs targeting rare diseases. These drugs – such as high-tech cancer fighters – come with very high margins and barriers to entry. The same could be said for our pick’s new forays into robotic surgery and diabetes devices. The best part is that our selected firm should have plenty of cash available to develop new drugs as well as smartly use M&A to pick up smaller rivals.
In the end, this will only help supercharge our pick’s robust pace of dividend and earnings growth. And when you combine this with overall rising healthcare spending, our pick could be a huge value in the making.
To summarize, here are five reasons why you should own this stock:
- Last quarter alone, earnings per share jumped 23% on the back of lower legal costs and higher-margined drug/device sales.
- Large global portfolio covering pharmaceuticals, medical devices and consumer products.
- Rich pipeline with many late-stage biotech drugs targeting cancer, HIV and other serious/rare diseases.
- Steadily increased its dividend for over 50 years straight, with the latest increase of 5%+ coming at the start of this year.
- Healthy payout ratio of 46% and yield of 2.96%.
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