Investors turn to the large drug company stocks for several reasons. They are considered recession-proof, they are a play on the ageing of the baby boomers, and they are often considered safer and less volatile than most other stocks. Since dividends are so vital to many investors these days, the high-yielding big pharmas are of interest. All of the following have yields of more than 2.5%, PEs below 20 and PEGs below 3.
Pfizer (PFE): Its drugs include Lipitor, Norvasc Caduet, Chantix/Champix, Lyrica, Geodon/Zeldox, Aricept, Zoloft, Celebrex, Vfend, Zyvox, Viagra, Detrol and Zyrtec, and, for animals, Clavamox/Synulox, RespiSureOne/StellamuneOne, Bovi-Shield Gold, Dectomax and Draxxin. The stock yields 7.5%. It has a P/E of 12.7 and a PEG of 2.12.
Bristol Myers Squibb (BMY): Its drugs include Plavix, Avapro/Avalide, Pravachol, Coumadin, Reyataz, Sustiva, Baraclude, Erbitux, Taxol, Sprycel, Ixempra, Abilify, Orencia and Efferalgan. The stock yields 7.2%. It has a P/E of 16.3 and a PEG of 1.54.
GlaxoSmithKline (GSK): Its drugs include Seretide/Advair, Avandia, Lamictal, Wellbutrin, Zofran, Valtrex, Coreg, Imigran/Imitrex, Augmentin, Seroxat/Paxil and Flixotide/Flovent. The stock yields 5.5%. It has a P/E of 11.9 and a PEG of 1.99.
Eli Lilly (LLY): Its drugs include Zyprexa, Cymbalta, Strattera, Prozac, Symbyax, Humalog, Actos, Byetta, Evista, Forteo, Gemzar, Alimta and Cialis. The stock yields 5.5%. It has a P/E of 9.9 and a PEG of 1.39.
Merck (MRK): Its drugs include Singulair, Cozaar, Hyzaar, Vasotec, and Vaseretic, Fosamax, Zocor, Cosopt, Trusopt, Primaxin, Cancidas, Januvia, Maxalt and Proscar. The stock yields 5.4%. It has a P/E of 12.4 and a PEG of 2.48.
Bayer (BAYRY.PK): Its drugs include the famous Bayer aspirin. The stock yields 3.8%. It has a P/E of 13.2 and a PEG of 1.26.
Wyeth (WYE): Its drugs include neuroscience therapies, vaccines, musculoskeletal therapies, nutrition products, gastroenterology drugs, anti-infectives, oncology therapies, hemophilia treatments and immunological products. The stock yields 3.5%. It has a P/E of 9.6 and a PEG of 2.48.
Roche Holding (RHHBY): Its drugs include Xenical, Valium, Zenapax, Valcyte, Bactrim, Tarceva, CellCept and Boniva. The stock yields 3.3%. It has a P/E of 14.6 and a PEG of 1.91.
Novartis (NVS): Its drugs include those for cardiovascular, metabolism, oncology, hematology, neuroscience; respiratory, infectious diseases, transplantation, immunology, ophthalmics, dermatology, gastrointestinal, urinary, arthritis and bones. The stock yields 3.2%. It has a P/E of 16.0 and a PEG of 2.34.
Johnson & Johnson (JNJ): Its drugs include Risperdal, Invega, Remicade, Procrit, Topamax, Levaquin and Floxin. There brands also include Aveeno, Band-Aid, Carefree, Clean & Clear, Listerine, Motrin IB, Neutrogena, RoC, Pepcid AC, Rembrandt, Splenda, Stayfree, Sudafed and Tylenol. The stock yields 2.9%. It has a P/E of 14.4 and a PEG of 1.65.
If you like high yield stocks, you should check out Top Yielding Debt Free Stocks, and Highest Yielding Electric Utilities. And if you like monthly dividend stocks, check out the list at WallStreetNewsNetwork.com.
Author owns PFE and BAYRY.PK.
Posted on Oct. 28, 2008
