This is a guest contribution by ValueWalk
On the back of a changing economic cycle and a tumultuous year on the stock market, investors have been frantically looking to park their cash in solid assets, while cushioning their portfolios against a potential recession.
To that end, Sure Dividend has compiled a list of nearly 500 healthcare stocks (along with important investing metrics like price-to-earnings ratios and dividend yields) which you can download below:
Earlier in the year, the market meltdown wiped out more than $7 trillion of market value in blue chip stocks in the S&P 500. At the time, the index was already down 18%, and many had predicted that further market deterioration could be expected for the later part of the year.
Now that we have approached the end of the year, investors are still relatively squeamish about forward-looking prospects, with many predicting another big downturn in the market as continuous economic changes are battering macro performance indicators.
Although it is hard to properly predict what the coming months will hold in, there are some winners – and losers – that investors are looking to add to their portfolios, not so much for near-term gain, but rather for long-term returns.
On the backside of this, big pharma stocks have performed fairly well this year, despite the late-stage economic changes. Despite the unrest, from soaring inflation, aggressive interest rate hikes, and geopolitical unrest – there’s a somewhat positive attitude surrounding what big pharma could present investors in the coming months.
Walgreens Boots Alliance, Inc. (WBA)
Walgreens (WBA) is perhaps not the first name that comes to mind when you think of big pharma, but the company has been investing a lot of money in upgrading its primary healthcare practices and facilities.
Earlier in the year, the company announced that it will be investing more than $5.2 billion in VillageMD, which runs and operates its primary healthcare practices. This would give Walgreens more room to expand within the healthcare industry, by providing consumers easier access to clinics and pharmacies across the country. The billion-dollar investment will see Walgreens adding more than 1,000 co-located clinics by 2027, with already having completed 200.
Though company stock has been slightly beaten down in 2022 due to higher prices and slower consumer spending, there is still steady growth on the line, and many expect the company’s stocks to recover again in 2023.
Between mid-October and early December, WBA was up by more than 29%, despite the company announcing falling sales, but still outpacing the market at the same time. In November, stocks jumped by 4.6% after Deutsche Bank upgraded WBA to buy, as analysts praised the collaboration between Walgreens and VillageMD.
WBA is a Dividend Aristocrat with over 40 consecutive years of dividend increases.
Amgen Inc. (AMGN)
Amgen (AMGN) is a big player in the therapeutic marketplace, manufacturing therapeutic-focused products for inflammation, oncology, bone health, nephrology, and cardiovascular disease.
In mid-October 2022, ChemoCentryx, a clinical pharmaceutical company that researches and develops orally-administered therapeutic treatments, agreed to the $3.7 billion Amgen acquisition. The acquisition means that Amgen will be able to improve its product development even further, and also help to boost its research and development for treatments.
On the stock market, there have been some positive signs, with AMGN jumping more than 21% year-to-date (YTD). Although stocks have grown significantly, despite broader macroeconomic challenges, the Zacks Ranking currently rates AGMN at a Hold position, with analysts still exploring the possibility of the stocks in the next few months.
While it’s hard to say whether AMGN is a hit or miss, analyst Matthew Harrison at Morgan Stanley upgraded AMGN in October with a price target of $279. Some analysts have claimed that the company’s stocks are underappreciated and that though the current changing economic cycle has posed several problems, AMGN is sitting in a defensive position with greater short-term opportunities.
Pharmaceutical company AbbVie (ABBV) has been zig-zagging across the stock market in the last few years, and the company has managed to shake off slow-performing guidance on the back of its branded biopharmaceutical operations.
Although the company did experience some disruptions throughout much of the pandemic, ranging from supply chain issues, to product shortages, the last few years coming out of the global health crisis have given ABBV some stronger traction on the stock market.
This year, ABBV stocks have been ascending, climbing 22% YTD, despite seeing some hits and misses. Closer to the end of the year. AbbVie announced that it will be increasing dividend payouts by 5% for 2023, leaving quarterly payouts to jump to $1.48 per share. This increase would apply to all shareholders who have been on record since January 2013.
AbbVie trails a strong dividend record as part of the dividend aristocrats index, and while the 5% increase was expected, it’s still somewhat lower than previous years, yet the company is continuously positive that the coming year will present innovative opportunities for them within the marketplace.
ABBV has increased its dividend for 50 consecutive years, making it a Dividend King.
AstraZeneca PLC (AZN)
AstraZeneca (AZN) played a big role in the manufacturing of the notorious COVID-19 vaccine, and while at the time it helped put the company more on the map than what it was before, popularity for AZN has stood through the last few months of economic headwinds and slower vaccine production as the pandemic has begun to wind down.
Although this might give investors a bearish sentiment, with many unsure what 2023 will hold in store for the company, AZN has seen strong gains in the last 12 months, jumping roughly 20% YTD. The company has been considered to be one of the more alluring dividend stocks to buy, with AZN yielding 2.71% as of December 2022.
There has been some growth in partnership deals over the last few months as well, with AstraZeneca signing a partnership with Invitae Corporation in October. The partnership deal gives the company more access to resourceful information and prospective studies of patients diagnosed with cholangiocarcinoma, a rare bile duct cancer. With the partnership, it would mean that the company can now boost manufacturing or case-specific treatments.
Gilead Sciences, Inc. (GILD)
There has been a lot of positive news surrounding Gilead Sciences (GILD) this year, as the company has been spearheading the development of drugs and pharmaceuticals for unmet medical needs.
During Q3 performance, Gilead announced better-than-expected sales for specific products, with cancer drug sales surging more than 79%. Increasing sales and positive forward-looking guidance have meant that investors have been relatively bullish, looking to GILD as a long-term holder that can provide some needed portfolio cushioning.
Gilead’s wide range of product offerings has meant that the company can provide consistent dividend payouts, with earnings up by 70% since the start of 2016. On a year-to-date basis, GILD performance has peaked at 22%, and the company has a steady dividend yield of 3.29%.
Going into the new year will be an interesting experiment for the company, as it aims to further research and develop products related to unmet medical treatments, which could play in favor of investors looking for innovative big pharma companies that can consistently provide growth even against the backdrop of greater economic challenges.
The industry has a lot of room to grow in the coming year, and some companies have been improving their collaborative efforts to help expand their market influence. Not only this, it’s allowed them to boost research and development for advanced pharmaceuticals.
This year has presented some challenges and stepping into the new year might not look any different. Despite the uncertainty, there are still some positive dividend payers on the market that provide investors with the right amount of exposure and volatility. Finding the balance would mean that investors need to look for big pharma companies that meet all their needs, but also follow a definitive forward-looking strategy.
Sure Dividend maintains similar databases on the following useful universes of stocks:
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Champions: stocks with 25+ years of dividend increases, including stocks which may not otherwise qualify as Dividend Aristocrats.
- The Dividend Contenders: 10-24 consecutive years of dividend increases.
- The Dividend Challengers: 5-9 consecutive years of dividend increases.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Complete List of High Dividend Stocks: Stocks with 5%+ dividend yields.
- The Complete List of Monthly Dividend Stocks: our database currently contains more than 30 stocks that pay dividends every month.
- The Blue-Chip Stocks List: our list of “blue-chip stocks” is a combination of our Dividend Kings, Dividend Aristocrats, and Dividend Achievers lists.