Investors love huge biotech opportunities for growth. Investors also love to get paid in the form of dividends. Unfortunately, the terms “dividend” and “biotech” never match up. While some hopes have been out there for dividends from the likes of Amgen Inc. (NASDAQ: AMGN) and even Gilead Sciences Inc. (NASDAQ: GILD), this may still not really be a 2011 story.
Amgen Inc. (NASDAQ: AMGN) is expected to be the first such biotech-dividend stock out there. It has not yet happened. Our indications from recent conferences is that Amgen is closer to considering a dividend but is still not ready to pull the trigger. That is too bad considering buybacks and a stock on the road to nowhere. Amgen in many cases now acts and feels like just a Big Pharma player with low growth. Without a dividend it is not even that.
Gilead Sciences Inc. (NASDAQ: GILD) is refraining from declaring a dividend and this week’s healthcare conference did not bring us any closer to believing that this biotech would trump Amgen by declaring a dividend. Gilead is likely to continue looking for growth opportunities via acquisitions.
Amgen states on its investor relations website: Amgen does not pay a dividend on stock, and does not foresee doing so in the immediate future. Accordingly, Amgen does not offer a DRIP (Dividend Reinvestment Program).
Gilead states on its investor relations website: Currently the company does not offer a dividend or stock reinvestment plan.
Gilead has a $31.3 billion market cap, has over $2 billion in cash and short-term investments, an additional $3.2 billion in ‘long-term’ investments, and only carries about $2.8 billion in long-term debt (as of December 31, 2010).
Amgen has a market cap north of $48 billion, had about $17 billion between cash and short-term investments at year-end.
No solid commitment here for dividend investors. We’ll look out to Amgen’s April 21 “Business Review Meeting” for more information on a dividend.
JON C. OGG
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