In this article, we discuss 13 Best Pharma Dividend Stocks To Buy In 2024.
The pharmaceutical industry in 2024 faced a relatively quiet year, with deal volumes similar to 2023 but lower deal values, reflecting a shift toward smaller, more strategic transactions. Despite challenges such as patent expirations and market uncertainty, innovation remains strong, and there is a better investment environment for biotech. Lower interest rates have also eased capital costs, contributing to increased mergers and acquisitions activity. Biotech IPOs and venture capital investments are seeing a slight recovery, though investment is more concentrated in established companies. However, major pharmaceutical companies face a $300 billion growth gap due to patent expirations, making dealmaking crucial for future growth.
Looking ahead to 2025, EY believes that the pharmaceutical sector is expected to see more deal activity, especially if interest rates remain low. There may be a rise in larger acquisitions to address growth gaps, although smaller, strategic deals are likely to persist. Politically, the US policy environment is shifting with potential impacts on business, including lower corporate taxes and deregulation, but also the possibility of higher tariffs and continued drug pricing reforms. Changes in immigration and leadership within health agencies could also affect the pharmaceutical and biotech industries, with new appointees potentially disrupting the regulatory landscape.
As executives prepare for 2025, drug pricing and access remain their top concerns, according to a Deloitte survey. The survey highlighted that primary concerns include competition from generic drugs and biosimilars and the looming patent cliff, with over $300 billion in sales at risk due to expiring patents by 2030. This has executives expecting a surge in mergers and acquisitions in 2025.
Innovation remains at the forefront as companies look to fill gaps left by expiring patents. However, competition in profitable areas like oncology and immunology is fierce, leading to price pressures even before generics or biosimilars hit the market. On the flip side, the success of GLP-1 receptor agonists is sparking renewed interest in general medicines, with companies racing to tap into the $200 billion market. Additionally, about 20% of companies are adjusting their portfolios to focus on high-potential candidates and better meet market demands. Advanced therapies like cell and gene therapies are also gaining attention, with a shift away from more traditional drugs.
In addition to the competitive landscape, life sciences companies are also keeping a close eye on regulatory changes. In the United States, concerns about the Inflation Reduction Act are growing, while in Europe, shifts in clinical trial regulations could add complexity. As a result, life sciences companies are preparing for a year of both innovation-driven growth and regulatory challenges.
A well-stocked pharmacy shelf full of the company’s pharmaceuticals, nutraceuticals, over-the-counter medications, and health care products.
Our Methodology
In this article, we reviewed Insider Monkey’s Q3 2024 database to identify pharmaceutical dividend stocks that hedge funds favored the most. The companies listed below are ranked in ascending order based on the number of hedge fund holders in each firm.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
13. Gilead Sciences, Inc. (NASDAQ:GILD)
Dividend Yield as of December 28: 3.33%
Number of Hedge Fund Holders: 59
Gilead Sciences, Inc. (NASDAQ:GILD) is a global biopharmaceutical company that develops and sells medicines for unmet medical needs. The company markets treatments for HIV/AIDS, COVID-19, viral hepatitis, oncology, and other conditions. Gilead Sciences, Inc. (NASDAQ:GILD)’s lenacapavir, a twice-yearly injection for HIV prevention, is a major breakthrough in HIV pre-exposure prophylaxis (PrEP) treatment. Clinical trials showed a 100% prevention rate in cisgender women and a 96% reduction in infection rates among cisgender men and gender-diverse individuals.
Gilead Sciences, Inc. (NASDAQ:GILD) delivered strong Q3 2024 earnings, with robust growth in HIV, Oncology, and Liver Disease, highlighted by a 9% year-over-year increase in HIV sales and record-breaking demand for Biktarvy. Total product sales reached $7.5 billion, up 7%, driven by strong performance across key segments. Lenacapavir, a potential game-changer for HIV prevention, is on track for FDA approval by year-end, with commercialization plans underway for 2025. Gilead remains focused on delivering innovative treatments and expects continued momentum into 2025.
On November 7, Gilead Sciences, Inc. (NASDAQ:GILD) declared a $0.77 per share quarterly dividend. The dividend is distributable on December 30, to shareholders on record as of December 13. It is one of the best dividend stocks to invest in.
Gilead Sciences, Inc. (NASDAQ:GILD) is a popular pharma name among Wall Street hedge funds. At the end of Q3 2024, 59 hedge funds were bullish on Gilead Sciences, Inc. (NASDAQ:GILD), compared to 62 in the last quarter.
12. Humana Inc. (NYSE:HUM)
Dividend Yield as of December 28: 1.43%
Number of Hedge Fund Holders: 60
Humana Inc. (NYSE:HUM) provides medical and specialty insurance products. It offers medical and supplemental benefit plans, including Medicare, Medicaid, and long-term support services, along with dental, vision, life insurance, and pharmacy benefit management. The company also delivers military services, operates pharmacies and senior-focused care centers, and provides home health and hospice services.
Cigna and Humana Inc. (NYSE:HUM) explored a merger last year but paused due to pricing disagreements and investor concerns. Talks reportedly restarted this fall, aiming to create a healthcare giant with $300 billion in annual revenue, potentially rivaling UnitedHealth and CVS. However, Cigna’s CEO, David Cordani, recently dismissed the merger speculation, emphasizing the company’s focus on share buybacks over acquisitions.
In its Q3 2024 earnings call, Humana Inc. (NYSE:HUM) highlighted four key drivers of success – delivering well-priced Medicare products, ensuring clinical excellence for strong margins, maintaining operational efficiency, and strategically investing in growth for CenterWell and Medicaid. Quarterly results exceeded expectations, with projected annual growth of 5%, driven by disciplined pricing and increased marketing efforts. Operational efficiency is improving through technology, including AI tools that reduce administrative tasks while maintaining quality care. Strategic investments in senior-focused primary care clinics are driving growth, with plans to add 40 new locations this year. Despite industry challenges, Humana Inc. (NYSE:HUM) remains focused on balancing short-term earnings with long-term value creation.
On October 24, Humana Inc. (NYSE:HUM) announced its quarterly dividend of $0.885 per share. The dividend is payable on January 31, 2025, to shareholders on record as of December 31.
Boykin Curry’s Eagle Capital Management is the leading stakeholder of Humana Inc. (NYSE:HUM), with 3.2 million shares worth $1 billion. Overall, 60 hedge funds were bullish on the stock at the end of Q3 2024.
11. Novo Nordisk A/S (NYSE:NVO)
Dividend Yield as of December 28: 1.70%
Number of Hedge Fund Holders: 61
Novo Nordisk A/S (NYSE:NVO) develops, manufactures, and distributes pharmaceutical products globally, focusing on two primary segments – Diabetes and Obesity Care and Rare Diseases. The company offers treatments for diabetes, obesity, cardiovascular conditions, rare blood and endocrine disorders, and hormone replacement therapy. Novo Nordisk A/S (NYSE:NVO) ranks 11th on our list of the best dividend stocks.
Novo Nordisk A/S (NYSE:NVO) has had a strong first nine months of 2024, with sales up by 24% and operating profit growth of 22%, driven by scaling efforts and increasing demand for its diabetes and obesity treatments. They’ve tripled the number of patients using their GLP-1 treatments over the past three years, now reaching over 11.5 million patients worldwide. This growth was largely fueled by weekly injectables like Ozempic and Wegovy, with obesity care sales up 44% and diabetes care growing faster than the overall market at 21%.
In North America, GLP-1 sales for diabetes grew 33%, solidifying Novo Nordisk’s 54% market share, while globally, Wegovy sales surged 77%, supported by rising prescriptions and expanded market access. Meanwhile, their international operations saw a 95% growth in the branded obesity market, with Wegovy now available in more than 15 countries.
Novo Nordisk A/S (NYSE:NVO)’s 2024 free cash flow fell to DKK 71.8 billion from DKK 75.6 billion in 2023, driven by higher capital spending of DKK 31.1 billion, up from DKK 16.4 billion. The increase reflects investments in expanding production capacity, emphasizing the company’s focus on internal growth before shareholder returns and business development. NVO paid a $0.512 per share quarterly dividend to shareholders on August 26.
Insider Monkey’s Q3 database shows that 61 hedge funds were bullish on Novo Nordisk A/S (NYSE:NVO), compared to 67 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder in the company, with 13.30 million shares valued at $1.58 billion.
10. Zoetis Inc. (NYSE:ZTS)
Dividend Yield as of December 28: 1.21%
Number of Hedge Fund Holders: 62
Zoetis Inc. (NYSE:ZTS) ranks 10th on our list of the best dividend stocks in the pharma industry. The company specializes in the development, manufacturing, and marketing of animal health products, including medicines, vaccines, and diagnostics, both in the US and internationally. Zoetis Inc. (NYSE:ZTS) also provides point-of-care diagnostic tools, blood glucose monitors, and non-pharmaceutical products like nutritionals and genetic tests.
Zoetis Inc. (NYSE:ZTS) has seen impressive growth in the third quarter of 2024, with a 14% increase in revenue and a 15% rise in adjusted net income. This success is driven by strong demand across key product areas, including companion animals and livestock. Their focus on innovation, such as the osteoarthritis pain treatments Librela and Solensia, has been transformative, with Librela alone achieving 97% revenue growth globally. In the United States, Librela has already become the fourth-largest pet care product, with the potential to expand further. Zoetis Inc. (NYSE:ZTS)’s dermatology franchise, including Apoquel, has also seen significant success, growing from a $70 million to a $1.5 billion market, making Apoquel the top prescribed medication in animal health. The company’s commitment to innovation and strong customer relationships position them well for the future.
On December 12, Zoetis Inc. (NYSE:ZTS) declared a $0.50 per share quarterly dividend, a 16% increase from its previous dividend of $0.43. The dividend is distributable on March 4, 2025, to shareholders on record as of January 21.
Zoetis Inc. (NYSE:ZTS) was a part of 62 hedge fund portfolios at the end of the third quarter, compared to 61 in the prior quarter. William Von Mueffling’s Cantillon Capital Management is the largest position holder in the company, with 1.28 million shares worth $251.3 million.
9. CVS Health Corporation (NYSE:CVS)
Dividend Yield as of December 28: 6.00%
Number of Hedge Fund Holders: 63
CVS Health Corporation (NYSE:CVS) offers a range of health solutions in the U.S. through three segments: Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness. It provides health insurance products, pharmacy benefit management services, and sells prescription and over-the-counter medications. The company also offers health and beauty products, pharmacy consulting, and services to care facilities.
CVS Health Corporation (NYSE:CVS), once seen as a potential US healthcare giant, has faced challenges despite its ambitious expansion. After acquiring Caremark, Aetna, Signify Health, and Oak Street Health, the company aimed to create a healthcare one-stop shop. However, its strategy has faltered, leading to a reduced earnings outlook and a market value of just $80bn, lower than its acquisition costs. Its net debt has surged to $50bn. The company also faces lawsuits over inflated insulin prices and its legacy drugstore business is declining due to competition from Amazon and Walmart. Despite these issues, CVS’s retail arm remains more resilient than some competitors.
CVS Health Corporation (NYSE:CVS)’s Q3 2024 revenues reached $95.4 billion, a 6% year-over-year increase driven by growth in its healthcare benefits and pharmacy segments. Adjusted operating income was $2.5 billion, with adjusted EPS at $1.09, while cash flow from operations stood at $7.2 billion year-to-date, impacted by CMS receipt timing and increased utilization costs. Medical membership grew to 27.1 million, though rising costs and utilization pressures in Medicare and individual exchanges negatively affected performance. Medicaid also faced higher costs due to redeterminations, and commercial business growth is expected to slow in 2025. On the positive side, the pharmacy and consumer wellness segment achieved $32.4 billion in revenue (up 12%), with a 15% increase in adjusted operating income driven by prescription volume and improved drug purchasing.
CVS also returned $837 million to shareholders via dividends during the quarter and ended with $1.2 billion in cash. Its leverage ratio was 4.6x, exceeding the long-term target, but the company remains committed to maintaining investment-grade ratings and aims to reduce leverage through margin recovery in the Aetna business.
Among the 63 hedge funds bullish on CVS Health Corporation (NYSE:CVS) in Q3, Pzena Investment Management held the largest stake, valued at approximately $826 million.
8. Amgen Inc. (NASDAQ:AMGN)
Dividend Yield as of December 28: 3.61%
Number of Hedge Fund Holders: 68
Amgen Inc. (NASDAQ:AMGN) develops and delivers human therapeutics globally. Its key products address conditions like psoriasis, osteoporosis, cardiovascular risks, cancer, and anemia. Amgen is particularly appealing due to its undervaluation and strong pipeline, including the experimental obesity drug MariTide, which could significantly boost its valuation. Even without MariTide’s success, Amgen’s intrinsic value remains solid. This favorable risk/reward dynamic, combined with its strong fundamentals, makes Amgen a compelling choice, with the potential for significant upside as the pharma sector stabilizes. Amgen Inc. (NASDAQ:AMGN) is also 8th on our list of the best dividend stocks.
Amgen Inc. (NASDAQ:AMGN) reported strong Q3 results with a 23% revenue increase to $8.5 billion, driven by double-digit growth in 10 products. Key drivers included a 17% rise in oncology sales, a 21% increase in rare disease sales, and a 67% growth in TEZSPIRE for severe asthma. Repatha and EVENITY also showed strong performance in general medicine. The company’s pipeline progress, particularly with the obesity drug MariTide, positions it for long-term growth. Biosimilars also performed well, with a 9% sales increase.
Amgen Inc. (NASDAQ:AMGN) returned capital to shareholders with a 6% increase in its dividend, paying $2.25 per share in Q2. For 2024, the company expects total revenues between $33.0 billion and $33.8 billion, with non-GAAP EPS ranging from $19.20 to $20. Q4 non-GAAP EPS is expected to be lower than Q3 due to planned investments in key assets like MariTide and olpasiran, as well as other strategic initiatives.
According to Insider Monkey’s Q3 database, Amgen Inc. (NASDAQ:AMGN) was found in 68 public stock portfolios, compared to 69 in the last quarter. Two Sigma Advisors is one of the most prominent stakeholders of the company.
7. AbbVie Inc. (NYSE:ABBV)
Dividend Yield as of December 28: 3.74%
Number of Hedge Fund Holders: 68
AbbVie Inc. (NYSE:ABBV) is a global pharmaceutical company that discovers, develops, manufactures, and sells a wide range of medications, including Humira for autoimmune diseases, Skyrizi for psoriasis, Rinvoq for arthritis, and Imbruvica for blood cancers. Its portfolio also includes Botox, Parkinson’s disease treatments, migraine medications, and eye care products. AbbVie Inc. (NYSE:ABBV) is one of the best dividend stocks for an income portfolio.
AbbVie Inc. (NYSE:ABBV) exceeded sales expectations with a $260 million overachievement in Q3 2024, driven by strong growth from its ex-Humira platform, including Skyrizi and Rinvoq, which are expected to generate over $17 billion in combined sales. The company raised its full-year revenue and EPS guidance, reflecting robust performance across key products like Venclexta, Vraylar, Ubrelvy, and Qulipta.
AbbVie also completed the acquisition of Cerevel Therapeutics, strengthening its neuroscience pipeline with promising developments for Parkinson’s and schizophrenia. Additionally, AbbVie Inc. (NYSE:ABBV)’s R&D efforts are progressing, with new approvals and studies underway, including Vyalev for Parkinson’s and Botox for platysma bands. The company also announced a 5.8% increase in its quarterly dividend, continuing its commitment to long-term growth. Skyrizi and Rinvoq demonstrated strong performance, with Skyrizi leading in psoriatic disease and rapidly gaining market share in Crohn’s and ulcerative colitis.
Insider Monkey’s third quarter database indicates that 68 hedge funds were long AbbVie Inc. (NYSE:ABBV), compared to 67 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is a prominent stakeholder in the company, with 1.7 million shares worth $333.2 million.
6. Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of December 28: 4.33%
Number of Hedge Fund Holders: 70
Bristol-Myers Squibb Company (NYSE:BMY) is a leading global biopharmaceutical company specializing in the discovery, development, manufacturing, and marketing of treatments for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. Bristol-Myers Squibb Company (NYSE:BMY) is one of the best dividend stocks to consider.
Bristol-Myers Squibb Company (NYSE:BMY) achieved solid Q3 results, with a 20% revenue increase in its growth portfolio, driven by innovative treatments like Cobenfy for schizophrenia and advancements in oncology. The company’s primary milestones included FDA approvals, promising data for therapies like nivolumab, and progress in areas like radiopharmaceuticals. The company is focused on transformational medicines, operational efficiency, and strategic investments, aiming to save $1.5 billion by 2025 and reduce $10 billion in debt by mid-2026. With strong clinical pipelines and upcoming data presentations, Bristol-Myers Squibb Company (NYSE:BMY) is well-positioned for sustainable growth.
The company’s commitment to maintaining its dividend remains steadfast, supported by a strong cash flow that allows it to improve its financial outlook. For 2024, BMS projects full-year revenue growth of around 5% on a reported basis and 6% at constant currency, driven primarily by stronger-than-expected sales of Revlimid. On December 16, Jefferies upgraded Bristol-Myers Squibb Company (NYSE:BMY) stock from Hold to Buy, raising its price target from $63 to $70.
On December 11, Bristol-Myers Squibb Company (NYSE:BMY) announced a $0.62 per share quarterly dividend, a 3.3% increase from its previous dividend of $0.60. The dividend is payable on February 3, 2025, to shareholders on record as of January 3.
70 hedge funds in Insider Monkey’s third-quarter database were bullish on Bristol-Myers Squibb Company (NYSE:BMY), up from 61 funds in the prior quarter.
5. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of December 28: 6.53%
Number of Hedge Fund Holders: 80
Pfizer Inc. (NYSE:PFE), founded in 1849 and headquartered in New York, develops, manufactures, and markets biopharmaceutical products globally. It offers medicines and vaccines across multiple therapeutic areas, including cardiovascular, women’s health, and infectious diseases, with key brands like Eliquis, Nurtec ODT/Vydura, and the Prevnar family. Pfizer Inc. (NYSE:PFE) is one of the best dividend stocks to consider.
Oncology is achieving significant growth, with a 31% year-over-year increase driven by strong demand for legacy Pfizer Inc. (NYSE:PFE) and Seagen products. Pfizer Inc. (NYSE:PFE) is now the third-largest US oncology biopharma by revenue. XTANDI, a market leader in advanced prostate cancer, grew 28% year-over-year, while TALZENNA saw a 77% increase, supported by positive survival data from the TALAPRO-2 study for metastatic castration-resistant prostate cancer. PADCEV with pembrolizumab has become the leading first-line treatment for advanced bladder cancer, while LORBRENA achieved 31% growth in thoracic cancer.
Pfizer Inc. (NYSE:PFE) reported Q3 revenues of $17.7 billion, a 32% operational increase. COVID-19 products contributed significantly, with PAXLOVID generating $2.7 billion and COMIRNATY adding $1.4 billion. Non-COVID products also saw strong growth, with revenues of $13.6 billion, up 14% year-over-year. Adjusted EPS was $1.06, benefiting from strong revenues, cost efficiency, and a favorable tax rate, while GAAP EPS was $0.78, impacted by a $420 million charge for a facility sale tied to the discontinued DMD program.
Capital allocation focused on deleveraging, dividends, and reinvestment. Pfizer Inc. (NYSE:PFE) returned $7.1 billion to shareholders via dividends, invested $7.8 billion in R&D, and reduced debt by $4.4 billion year-to-date. It also monetized Helion shares, reducing its stake from 23% to 15%, yielding $3.5 billion in proceeds. The company remains committed to its gross leverage target of 3.25x to enhance shareholder value.
Among the hedge funds tracked by Insider Monkey, Pfizer Inc. (NYSE:PFE) was part of 80 public stock portfolios, compared to 84 in the last quarter. Two Sigma Advisors is one of the leading stakeholders of the company, with a position worth nearly $491 million.
4. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of December 28: 3.43%
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ) operates globally in healthcare through its Innovative Medicine and MedTech segments. It offers treatments for conditions like rheumatoid arthritis, HIV/AIDS, schizophrenia, cancer, diabetes, and pulmonary hypertension. The MedTech segment provides solutions for heart disorders, stroke, orthopedics, surgeries, and vision care. Johnson & Johnson (NYSE:JNJ) ranks 4th on our list of the best dividend stocks.
Johnson & Johnson (NYSE:JNJ) achieved strong results in Q3, with 6.3% operational sales growth, driven by a shift towards high-innovation, high-growth markets. The company’s sales exceeded $14 billion for the second consecutive quarter in Innovative Medicine, with key brands, including DARZALEX, seeing double-digit growth. MedTech also saw positive momentum, particularly in Cardiovascular, with acquisitions of Shockwave and Abiomed boosting performance. The company made significant advancements, including FDA approvals for RYBREVANT and TREMFYA, and the launch of Shockwave E8 and new contact lenses.
Johnson & Johnson (NYSE:JNJ) remains confident in its future growth, having invested $18 billion in M&A, and raised its earnings guidance for the third quarter in a row. Worldwide Q3 sales reached $22.5 billion, with a net income of $2.7 billion and a diluted EPS of $1.11. Johnson & Johnson (NYSE:JNJ) ended Q3 with $20 billion in cash and marketable securities, and $36 billion in debt, resulting in a net debt of $16 billion. J&J also paid a $1.24 per share quarterly dividend on December 10. The company remains focused on innovation and strategic investments, spending nearly $5 billion on R&D during the quarter and $18 billion on acquisitions and licensing agreements, including the acquisition of V-Wave for heart failure treatments.
Insider Monkey’s third-quarter database shows that Johnson & Johnson (NYSE:JNJ) was found in 81 hedge funds, compared to 80 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder of the company, with 7.5 million shares worth $1.2 billion.
3. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of December 28: 3.30%
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a global healthcare company operating through two segments – Pharmaceutical and Animal Health. The Pharmaceutical segment offers a range of human health products, including treatments for oncology, immunology, neuroscience, virology, cardiovascular conditions, and diabetes, under well-known brands like Keytruda, Januvia, and Bridion. It also provides vaccines for various age groups under brands such as Gardasil and Pneumovax.
Merck & Co., Inc. (NYSE:MRK) has recently partnered with the Chinese biopharma company Hansoh to develop an oral GLP-1 receptor agonist for treating metabolic conditions and obesity, entering a market dominated by Eli Lilly and Novo Nordisk. Despite strong performances in oncology and vaccines, Merck’s stock has fallen 20% over the past six months. The licensing deal with Hansoh includes a $112 million upfront payment and up to $1.9 billion in royalties and milestones.
Merck & Co., Inc. (NYSE:MRK) reported $16.7 billion in total revenues, a 4% increase, or 7% excluding foreign exchange effects. The human health business grew 8%, driven by oncology, while the Animal Health business saw an 11% sales increase. Key oncology product KEYTRUDA grew 21% to $7.4 billion, fueled by expanded use in both early and metastatic cancers. Lynparza revenue grew 13%, while sales of WELIREG more than doubled. GARDASIL sales decreased 10%, primarily due to a decline in China, though global sales increased in other regions. Merck & Co., Inc. (NYSE:MRK)’s full-year earnings guidance has been adjusted to $7.72 to $7.77 per share, factoring in foreign exchange and business developments. The company remains focused on innovation, dividend growth, and pursuing strategic acquisitions.
On November 19, Merck & Co., Inc. (NYSE:MRK) announced a quarterly dividend of $0.81 per share, a 5.2% increase from its prior dividend of $0.77. The dividend is distributable on January 8, 2025, to shareholders on record as of December 16.
Insider Monkey’s Q3 database shows that Merck & Co., Inc. (NYSE:MRK) was held by 86 hedge funds, compared to 96 funds in the last quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with a position worth nearly $800 million.
2. Eli Lilly and Company (NYSE:LLY)
Dividend Yield as of December 28: 0.78%
Number of Hedge Fund Holders: 106
Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company that offers treatments for diabetes, oncology, rheumatoid arthritis, psoriasis, migraines, and more. The company’s main products include Humalog, Trulicity, Alimta, and Taltz. Eli Lilly and Company (NYSE:LLY) also focuses on RNA and DNA-based therapies at its Lilly Seaport Innovation Center.
Eli Lilly and Company (NYSE:LLY)’s revenue grew by 42% in Q3 2024, driven by strong sales of Mounjaro and Zepbound, with US demand continuing to rise. Non-incretin product revenue grew by 17%. The main milestones included the approval of Ebglyss for atopic dermatitis, Kisunla for Alzheimer’s, and positive data from studies on tirzepatide and donanemab. Eli Lilly and Company (NYSE:LLY) also expanded its manufacturing footprint, investing nearly $2 billion in Ireland and committing $4.5 billion to develop the Lilly Medicine Foundry in Indiana. The company returned $1.6 billion to shareholders and saw a 13% increase in R&D expenses. Gross margin improved to 82.2%, and earnings per share rose to $1.18, up from $0.10 in Q3 2023.
The Egyptian Drug Authority has granted approval for EVA Pharma’s insulin glargine injection, developed in collaboration with Eli Lilly and Company (NYSE:LLY). This approval marks an important milestone in their 2022 partnership, which aims to provide affordable insulin to one million people with diabetes in low- and middle-income countries, particularly in Africa. Eli Lilly and Company (NYSE:LLY) supplies the active ingredient at a discounted price and supports EVA Pharma with technology transfer to locally manufacture the insulin. This initiative is part of Eli Lilly’s 30×30 goal, aimed at enhancing healthcare access for 30 million people annually in underserved regions by 2030.
On December 10, Eli Lilly and Company (NYSE:LLY) increased its quarterly dividend by 15.4%, raising it from $1.30 to $1.50 per share. The dividend will be paid on March 10, 2024, to shareholders on record as of February 14.
Eli Lilly and Company (NYSE:LLY) is a favorite pharma stock among hedge funds. 106 Wall Street funds were bullish on Eli Lilly and Company (NYSE:LLY) at the end of Q3 2024, up from 100 funds in the earlier quarter.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Dividend Yield as of December 28: 1.68%
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that provides health benefit plans and services to individuals, employers, and Medicaid recipients, along with care delivery, management, and wellness services. The company also offers software and consulting for healthcare organizations and provides pharmacy care services, including retail, home delivery, and drug management programs. UnitedHealth Group Incorporated (NYSE:UNH) ranks 1st on our list of the best dividend stocks in the pharma space.
UnitedHealth Group Incorporated (NYSE:UNH) has had a strong year, serving over 2 million new consumers with commercial offerings and filling more than 1.6 billion prescriptions through Optum Rx. The company also cares for 4.7 million people in value-based arrangements. The company remains optimistic about the future, even amid pressures in the healthcare sector. For instance, UnitedHealth’s launch of a national gold card program aims to reduce prior authorizations, improve care quality, and reduce friction.
In terms of financial performance, UnitedHealth Group Incorporated (NYSE:UNH) reported Q3 revenues of $101 billion, a 9% increase from the previous year, with strong growth in both Optum and UnitedHealthcare. OptumHealth saw revenues grow by $2 billion, driven by an increase in services for patients with complex needs, while OptumRx grew by $5 billion, fueled by a rise in pharmacy care offerings and new customers. UnitedHealthcare’s commercial business added 2.4 million new members, contributing to the company’s overall growth. The company has returned $9.6 billion to shareholders through dividends and share repurchases, while investing over $11 billion in strategic initiatives, including expanding partnerships like their collaboration with AARP to better serve older Americans.
According to Insider Monkey’s third quarter database, 112 hedge funds were long UnitedHealth Group Incorporated (NYSE:UNH), compared to 114 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 3.7 million shares worth over $2 billion.
Overall, UnitedHealth Group Incorporated (NYSE:UNH) ranks first on our list of the best pharma stocks. While we acknowledge the potential of UNH to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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