Large-cap pharma stocks are seemingly being left behind in today’s market. The Healthcare sector is up 1.9% year-to-date ahead of only Utilities (+1.3%) and Consumer Defensive (+0.3%). For perspective, the Energy (+39.1%) and Financial (+17.2) sectors are leading in 2021. Despite the relative overvaluation of the broader market and indices, there are still pockets of value in today’s market. This brings us to three large-cap pharma dividend growth stocks that are yielding about 4.5%+. They are AbbVie (ABBV) yielding ~4.7%, Gilead Sciences (GILD) yielding ~4.5%, and Pfizer (PFE) yielding about 4.4%. I view AbbVie, Gilead, and Pfizer as buys.
Impact of COVID-19
Healthcare companies were impacted by COVID-19. The second quarter was difficult for some companies as hospitals saw lower admissions, especially for elective procedures, and doctors’ offices saw fewer patients resulting in a lower number of prescriptions. Patient numbers rebounded through the year, but they are still trailing 2019. Furthermore, COVID-19 disrupted sales reps visiting doctors and other prescribers due to visitor restrictions likely affecting new product launches. Additionally, many pharma companies refocused efforts to develop vaccines and treatments for COVID-19. Although some pharma companies were adversely affected by the pandemic, others seemed to navigate the pandemic reasonably well largely depending on their product line.
3 Pharma Dividend Growth Stocks Yielding 4.5%
AbbVie is the first large-cap pharma stock that I view as a buy. AbbVie was spun out from Abbott Laboratories (ABT) in 2013. The company has strengths in immunology and oncology. Its top seller is HUMIRA (immunology), which is also the top-selling drug globally, generating nearly 40% of AbbVie’s sales and about half of profits…
The next large-cap pharma stock that I view as a buy is Gilead. The company is well known for its therapies treating HIV and hepatitis C [HCV], which are its main strengths. Indeed, SOVALDI and HARVONI cure hepatitis C causing the number of patients to decline….
The last large-cap pharma stock that I view as a buy is Pfizer. Pfizer is in the middle of major transformation since 2019. The company spun off its consumer products into a JV with GlaxoSmithKline (GSK). It followed that up with the spinoff of Upjohn, which was merged with Mylan NV forming Viatris (VTRS). Today, Pfizer is focused on R&D driven therapies…
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.