{"id":38732,"date":"2013-06-04T02:36:24","date_gmt":"2013-06-04T06:36:24","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=38732"},"modified":"2013-06-04T08:45:09","modified_gmt":"2013-06-04T12:45:09","slug":"why-the-stock-markets-sticking-with-these-two-pharma","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/06\/04\/why-the-stock-markets-sticking-with-these-two-pharma\/","title":{"rendered":"Why the Stock Market\u2019s Sticking with These Two Pharma"},"content":{"rendered":"

\"Stock<\/a>One sector we haven\u2019t looked at in quite some time is the big pharmaceutical stocks sector. Exposure to this sector is always welcome in a long-term stock market<\/a> portfolio.<\/p>\n

Like every company, big pharmaceutical companies experience their own business cycles, but dividend payments within the group are significant and worthy of attention.<\/p>\n

Bristol-Myers Squibb Company (NYSE\/BMY) was one of the higher dividend paying stocks within the group.<\/p>\n

The company got a major Wall Street upgrade from Citigroup, based on its Phase 3 development program for \u201cNivolumab,\u201d a new cancer treatment.<\/p>\n

The company recently experienced renewed stock market momentum after a period of consolidation. Its dividend yield is approximately three percent now because of the run-up. It was closer to five percent not too long ago.<\/p>\n

I\u2019m still a fan of combo pharmaceutical companies for long-term portfolios. By this I mean companies with other business lines, rather than pure-play drug development stocks. I\u2019m referring to companies like Johnson & Johnson (NYSE\/JNJ), which has pharmaceuticals, consumer products, medical devices, and diagnostics business lines. There\u2019s also Abbott Laboratories (NYSE\/ABT), which sells drugs, eye-care products, nutritional products, and dog food.<\/p>\n

This multifaceted business approach that includes the expensive, but also rewarding business of drug development creates a nice bit of diversification as the business cycle changes.<\/p>\n

Like virtually everything else in the large-cap space, Abbott has done great on the stock market over the last couple of years. The company<\/a> only experienced two long periods of flat performance since 1999. Abbott\u2019s stock chart is featured below:<\/p>\n

\"Abbott<\/a><\/p>\n

Chart courtesy of www.StockCharts.com<\/i><\/p>\n

In its latest quarterly report, the company\u2019s earnings from continuing operations improved substantially to $545 million, up from $351 million.<\/p>\n

Global revenues grew 3.5% on an operational basis to $5.4 billion. Currency translation knocked this back to 1.8%. The company\u2019s strongest growth was in its nutrition division, followed by diagnostics, and then established pharmaceuticals. (See \u201cWhy DuPont\u2019s Earnings Results Are So Typical for This Stock Market<\/a>.\u201d)<\/p>\n

Like Johnson & Johnson, Abbott is now trading at an all-time record-high on the stock market. In terms of valuation, however, Abbott has a price-to-earnings (P\/E) ratio of approximately 11.5. Johnson & Johnson\u2019s is around 23.<\/p>\n

For many years, I\u2019ve seen countless stock market portfolios hold either of these two companies\u2014sometimes both. With the stock market and these positions at all-time record-highs, it is difficult to make the case that they\u2019re worth accumulating at this particular point in time. But with a major retrenchment in the stock market, these stocks would certainly be worthy of consideration for long-term retirement portfolios.<\/p>\n

Both companies backed their previously stated 2013 full-year outlooks.<\/p>\n

A big pharmaceutical company that\u2019s diversified into other complementary business lines is the way to go if you\u2019re looking to make an investment in this sector. I\u2019m a big believer in the long-term wealth-creating effect of dividend reinvestment. A company with partial dividend reinvestment is also attractive.<\/p>\n

The stock market has shown it likes to stick with its winners. With any more upside, these two pharmaceutical giants\u2014Johnson & Johnson and Abbott Laboratories\u2014should keep ticking higher.<\/p>\n

Article by profitconfidential.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

One sector we haven\u2019t looked at in quite some time is the big pharmaceutical stocks sector. Exposure to this sector is always welcome in a long-term stock market portfolio. Like every company, big pharmaceutical companies experience their own business cycles, but dividend payments within the group are significant and worthy of attention. Bristol-Myers Squibb Company … <\/p>\n

Continue reading “Why the Stock Market\u2019s Sticking with These Two Pharma”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-38732","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/38732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=38732"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/38732\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=38732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=38732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=38732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}