10 Best Blue Chip Dividend Stocks To Buy

6. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 63

Amgen Inc. (NASDAQ:AMGN) is an American biotech company that mainly deals in the manufacturing of innovative therapies. The company’s investors have much to look forward to with MariTide, a weight loss drug that has the potential to be a major competitor to products from Novo Nordisk and Eli Lilly. In its recent earnings release, the company announced that topline Phase 2 data for this drug is expected by late 2024. It also stated that it plans to conduct Phase 3 trials for MeriTide across multiple indications. If brought to market, this drug could significantly boost the company’s revenue by billions and serve as a major catalyst for both its overall sales and share price.

In recent years, Amgen Inc. (NASDAQ:AMGN) has been growing its business through acquisitions in an effort to boost its revenue and achieve much-needed growth. One of its acquisitions, Horizon Therapeutics, which was closed in October last year, generated $914 million in sales in the first quarter of 2024. Overall, the company reported revenue of over $7.4 billion, which showed a significant hike of 22% from the same period last year. In the past year, the stock is up by over 42%, outperforming the broader market, which returned 26.5% during this period.

Amgen Inc. (NASDAQ:AMGN) is one of the best dividend stocks on our list as the company has been rewarding shareholders with growing dividends for the past 11 years. The stock also has an impressive dividend yield of 2.90%, as recorded on July 7. However, the company’s trailing twelve-month payout ratio of 123.2% doesn’t sit well with dividend investors. This was also seen in the most recent quarter when it paid more in dividends than it generated. The company’s operating cash flow for the quarter came in at $0.7 billion and its free cash flow for the period stood at $0.5 billion. It returned $1.2 billion to shareholders through dividends. That said, biotech companies prioritize reinvesting their profits in research and development (R&D) over paying dividends. Therefore, the high payout ratio shouldn’t be a major concern for investors.

According to Insider Monkey’s database of Q1 2024, 63 hedge funds owned investments in Amgen Inc. (NASDAQ:AMGN), compared with 69 in the previous quarter. These stakes have a consolidated value of over $1.3 billion.