The Basel, Switzerland-based firm's American depositary receipts have a dividend yield of 3.2%, and the payout has risen, on average, 15% annually over the past five years. At less than 12 times consensus 2010 earnings estimates of 4.63 Swiss francs ($4.55), Novartis is cheap, compared with the market P/E and its own average historical multiple of 18. While investors fret about the coming loss of patent, in 2011, on best-selling blood-pressure medication Diovan, sales of new drugs such as Galvus for diabetes and Tekturn for hypertension are building. In the near term, Novartis's H1N1, or swine flu, vaccine should boost results. Novartis' agreement to buy Alcon before August 2011 from Nestlé at a potentially rich price also worries some investors. But Novartis is good at cutting costs, and its sales are likely to keep growing in the high single digits.

Seymour was keen to hear Novartis (NVS) is investing $1 billion to build the largest pharmaceutical research plant in China, emphasizing the importance of developing markets for future growth. Novartis said it was also investing $250 million in a second research and development and manufacturing facility in Changshu. I like the direction Novartis is taking, adds Pete Najarian.

solid, successful

above average industrial strength earnings per share growth 9%

Raised its 2009 dividend by 25% from 1.60 Swiss Francs a share to 2.00, the 12th increase since the company was founded in 1996.

07-DEC'08: Novartis is a solid (if boring) pharmaceutical company with a wise management team. They have easily out-performed the S&P 500 performance over the last 6 months. This is the 2nd company recommended by The Motley Fool to do well under the Obama administration. Price/share @ start = $47.13

Proven to be a steady holding in this market

Novartis (NYSE: NVS)
Recent Share Price: $56.17
Below 52-Week High: 8%

Two-Minute Drill: Pharmaceutical behemoth Novartis trades, in our view, at an absurd discount to its peers, with a price-to-earnings ratio well below industry averages despite profitability metrics -- returns on assets and equity -- that trounce the broader market's average. What gives?

Our take is that Novartis's biotech arm is its headline proposition for Wall Street investors, and as an established player in a racy industry, the company doesn't pack the appeal of the purer-play competition. Indeed, while analysts have high double-digit hopes for Novartis this year, they're rather somber when it comes to out-year projections.

To our way of thinking, that merely underscores the analyst disconnect when it comes to this company -- and the appeal for patient investors as well. Long-term numbers aren't generally worth the spreadsheets they're calculated on, and particularly in a market like this one, we'll gladly take a company with seven consecutive years of top-line revenue growth (and nice free cash flow figures) over the biotech industry's scruffier rumors any day of the week.

Amgen Builds Body of Evidence for Bone Drug: Elizabeth Trotta talks to Glenn Begley, vice president for hematology oncology research at Amgen, about potential blockbuster bone drug denosumab.
Click here to watch the video.

Najarian also said keep an eye on Johnson & Johnson(JNJ), Novartis(NVS) and Myriad Genetics(MYGN).

drug potential