5 Best Pharma Dividend Stocks To Buy in 2023

In this article, we discuss 5 best pharma dividend stocks to buy in 2023. If you want to read our detailed analysis of the pharmaceutical sector and its outlook this year, go directly to read 12 Best Pharma Dividend Stocks To Buy in 2023. 

5. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 73

An Illinois-based pharmaceutical company, AbbVie Inc. (NYSE:ABBV) is next on our list of the best dividend stocks from the pharma sector. Morgan Stanley raised its price target on the stock in April to $181 with an Overweight rating on the shares, expecting the company to deliver growth in the second half of the year.

On February 16, AbbVie Inc. (NYSE:ABBV) declared a quarterly dividend of $1.48 per share, which fell in line with its previous dividend. The stock’s dividend yield on April 17 came in at 3.67%. The company is a Dividend King as it has been raising its dividends consistently for the past 50 years.

At the end of December 2022, 73 hedge funds in Insider Monkey’s database reported owning stakes in AbbVie Inc. (NYSE:ABBV), compared with 80 in the previous quarter. The collective value of these stakes is over $1.5 billion.

Baron Funds mentioned AbbVie Inc. (NYSE:ABBV) in its Q3 2022 investor letter. Here is what the firm has to say:

“AbbVie Inc. (NYSE:ABBV) is a drug developer best known for Humira, an immunosuppressant that is the best selling drug of all time. Given outsized key product risk (patent cliff and generic launches beginning in 2023), AbbVie has broadened its pipeline, highlighted by its Allergan acquisition. Shares fell on results that missed consensus and indications that legacy franchises were outperforming newer product launches, calling into question AbbVie’s long-term strategy. With promising assets in the pipeline and its robust cash flow profile, we believe AbbVie will grow well into the future.”

4. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 75

Pfizer Inc. (NYSE:PFE) is an American multinational pharmaceutical industry company, based in New York. In December 2022, the company declared a 2.5% hike in its quarterly dividend to $0.41 per share. This was the company’s 13th consecutive year of dividend growth, which makes it one of the best dividend stocks. The stock has a dividend yield of 3.98%, as of April 17.

In April, Barclays maintained an Equal Weight rating on Pfizer Inc. (NYSE:PFE) with a $43 price target, ahead of the company’s quarterly earnings.

As of the close of Q4 2022, 75 hedge funds in Insider Monkey’s database reported having stakes in Pfizer Inc. (NYSE:PFE), down from 77 in the previous quarter. These stakes have a collective value of over $2.5 billion.

Diamond Hill Capital mentioned Pfizer Inc. (NYSE:PFE) in its Q3 2022 investor letter. Here is what the firm has to say:

“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”

3. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 76

Eli Lilly and Company (NYSE:LLY) is an Indiana-based pharmaceutical company that sells its products in around 125 countries. In April, BofA raised its price target on the stock to $390 with a Buy rating on the shares, presenting a positive stance on the company’s performance.

One of the best dividend stocks on our list, Eli Lilly and Company (NYSE:LLY) has been making regular dividend payments to shareholders for the past 138 years. Moreover, it maintains a 9-year streak of consistent dividend growth. The company pays a quarterly dividend of $1.13 per share for a dividend yield of 1.21%, as recorded on April 17.

As of the fourth quarter of 2022, 76 hedge funds tracked by Insider Monkey reported owning stakes in Eli Lilly and Company (NYSE:LLY), up from 75 in the previous quarter. The collective value of these stakes is over $5 billion.

Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its Q4 2022 investor letter. Here is what the firm has to say:

“Eli Lilly and Company (NYSE:LLY) is a large-cap pharmaceutical company. Shares increased on investor optimism about Lilly’s new product pipeline, which includes Mounjaro for diabetes and obesity and Donanemab for Alzheimer’s disease. We continue to think Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to strong revenue and earnings growth over at least the next five years.”

2. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 77

A New Jersey-based multinational pharma company, Merck & Co., Inc. (NYSE:MRK) has been paying dividends to shareholders for a long time. The company has raised its payouts for 12 years in a row and currently pays a quarterly dividend of $0.73 per share. As of April 17, the stock has a dividend yield of 2.54%.

JPMorgan showed confidence in Merck & Co., Inc. (NYSE:MRK)’s cardiovascular sales target by the mid-2030s. Given this, the firm maintained an Overweight rating on the stock in April.

At the end of December 2022, 77 hedge funds tracked by Insider Monkey owned stakes in Merck & Co., Inc. (NYSE:MRK), with a total value of over $5 billion. Citadel Investment Group was the company’s largest shareholder in Q4.

Artisan Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter. Here is what the firm has to say:

“Merck & Co., Inc. (NYSE:MRK) is a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. Shares have benefited from investors seeking safety in areas with less economic and interest rate sensitivity. With about one third of its sales generated by blockbuster oncology drug Keytruda, the key issue for investors is the success of its large R&D pipeline to replace those sales when Keytruda comes off patent in 2028. However, Merck seems to be getting little credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions, besides return of capital to shareholders via dividends and share repurchases.”

1. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 84

Johnson & Johnson (NYSE:JNJ) tops our list of the best dividend stocks from the pharma sector. The company currently offers a quarterly dividend of $1.13 per share and has a dividend yield of 2.73%, as of April 17. It holds one of the longest dividend growth streaks of 61 years.

According to Insider Monkey’s Q4 2022 database, 84 hedge funds owned investments in Johnson & Johnson (NYSE:JNJ), with a total value of over $5.5 billion. Bridgewater Associates was one of the company’s leading stakeholders in Q4.

You can also take a look at 10 Best Mid-Cap Dividend Aristocrats To Buy and 12 Best Covid Treatment Stocks to Buy Today

Follow Insider Monkey on Twitter