Health and Healthcare
Dividend Watch: Lilly Highlights Drug Sector Dividends Ahead of Earnings Season (LLY, PFE, MRK, AZN, GSK)
Published:
Last Updated:
The drug sector has become rather boring and investors already know all about the ongoing patent expiration threats that loom in the industry. The good news is that the drug sector does still offer a very defensive profile for investors worried about the stock market in general and there are plenty of high-yield dividends to boot. Eli Lilly & Co. (NYSE: LLY) reported earnings this morning and we wanted to see how its dividend payments match up to larger rivals of Pfizer Inc. (NYSE: PFE) and Merck & Co. Inc. (NYSE: MRK).
Eli Lilly & Co. (NYSE: LLY) is down 1.6% around $35.45 after earnings today and its 52-week trading range is $32.02 to $38.08. So the shares are almost exactly wedged in the middle of its 52-week trading range. Now sees a $4.15 to $4.30, a drop of 9% to 12% in non-GAAP terms. More importantly, Lilly said that it sees cash flows being ample to fund capital expenditures of $800 to $900 million. It also said that cash flow is enough to fund business development and for the company’s dividend. We have now seen two years of $0.49 per quarter and the current dividend yield is roughly 5.5%.
Pfizer Inc. (NYSE: PFE) is down 1% at $20.32 today and its 52-week range is $14.00 to $20.75. Pfizer pays a 3.9% dividend yield currently. Merck & Co. Inc. (NYSE: MRK) is down 1.5% at $34.00 against a 52-week range of $30.70 to $37.68 and it currently pays a 4.4% dividend yield.
For those willing to take on the currency risks and variable dividend risks of ADRs, there are also Astrazeneca PLC (NYSE: AZN) and GlaxoSmithKline PLC (NYSE: GSK) which were in our top ADRs dividend review last week. Those are closer to 5% payouts.
Investors have had to learn to cope with more problems than positives in the drug sector. Growth is virtually gone and many face generic competition in the coming years on their key blockbuster drugs. It is also possible that any new health care concessions after the next election will have to involve even more ‘sharing’ from the drug companies. The good news is that there are still high dividends to boot and these annual payouts look very manageable for the companies even without real earnings growth.
JON C. OGG
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
