In this article, we discuss 5 defensive healthcare dividend stocks to buy now. If you want to read our detailed analysis of the healthcare sector and its performance over the years, go directly to read 12 Defensive Healthcare Dividend Stocks To Buy.
5. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of December 12: 2.57%
Johnson & Johnson (NYSE:JNJ) is an American leading Big Pharma company that specializes in medical devices and offers other medical services. The stock delivered a 2.45% return to shareholders year-to-date and its 12-month return came in at 4.33%, as of December 12.
Johnson & Johnson (NYSE:JNJ) is one of the best dividend stocks on our list as the company has raised its payouts for 60 years in a row. It currently pays a quarterly dividend of $1.13 per share and has a dividend yield of 2.57%, as of December 12.
In December, Morgan Stanley raised its price target on Johnson & Johnson (NYSE:JNJ) to $178 with an Equal Weight rating on the shares, appreciating the company’s decision to separate its Consumer Health segment into an independent company.
As of the close of Q3 2022, 85 hedge funds in Insider Monkey’s database owned stakes in Johnson & Johnson (NYSE:JNJ), up from 83 in the previous quarter. The collective value of these stakes is over $5.4 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q3.
Here’s what Distillate Capital Partners LLC said about Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter:
“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”
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4. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of December 12: 2.68%
An American multinational pharmaceutical company, Merck & Co., Inc. (NYSE:MRK) announced a 6% hike in its quarterly dividend to $0.73 per share. This marked the company’s 12th consecutive year of dividend growth. The stock’s dividend yield on December 12 came in at 2.68%. Its strong dividend history and dividend growth track make it one of the best dividend stocks in the healthcare sector.
In Q3 2022, Merck & Co., Inc. (NYSE:MRK) reported revenue of $15 billion, which showed a 14% growth from the prior-year period. It posted an EPS of $1.85, which beat estimates by $0.14.
In November, Credit Suisse initiated its coverage of Merck & Co., Inc. (NYSE:MRK) with an Outperform rating and a $120 price target, calling the company one of its top ideas among the US large-cap biopharma peer group.
As of the close of Q3 2022, 82 hedge funds tracked by Insider Monkey presented a bullish stance on Merck & Co., Inc. (NYSE:MRK), up from 79 in the previous quarter. The stakes owned by these hedge funds have a total value of over $4.7 billion.
Chartwell Investment Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter. Here is what the firm has to say:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
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3. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of December 12: 3.17%
Pfizer Inc. (NYSE:PFE) is a multinational pharmaceutical and biotech company. It reported a strong cash position in its recently-announced Q3 report. The company generated revenue of $22.6 billion, which beat Street estimates by $1.5 billion. It also paid $6.7 billion to shareholders in dividends, which makes it one of the best dividend stocks on our list.
Pfizer Inc. (NYSE:PFE) holds a 12-year streak of consistent dividend growth. The company offers a quarterly dividend of $0.44 per share and has a dividend yield of 3.17%, as of December 12.
Pfizer Inc. (NYSE:PFE) was a part of 77 hedge fund portfolios in Q3 2022, up from 70 in the previous quarter, as per Insider Monkey’s database. The collective value of stakes owned by these hedge funds is over $2.4 billion. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q3.
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.”
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2. Gilead Sciences, Inc. (NASDAQ:GILD)
Dividend Yield as of December 12: 3.32%
Gilead Sciences, Inc. (NASDAQ:GILD) is a California-based biopharmaceutical company that specializes in the research and development of antiviral drugs. In December, Piper Sandler raised its price target on the stock to $104 with an Overweight rating on the shares, highlighting the company’s recent collaborations.
In Q3 2022, Gilead Sciences, Inc. (NASDAQ:GILD) reported an operating cash flow of $2.9 billion and its free cash flow for the quarter came in at $2.7 billion. The company paid $928 million to shareholders in dividends and repurchased shares worth over $180 million during the quarter.
Gilead Sciences, Inc. (NASDAQ:GILD) currently pays a quarterly dividend of $0.73 per share for a dividend yield of 3.32%, as recorded on December 12. The company maintains a 12-year streak of dividend growth.
At the end of Q3 2022, 56 hedge funds tracked by Insider Monkey owned stakes in Gilead Sciences, Inc. (NASDAQ:GILD), valued at $3.63 billion collectively.
Ariel Investments mentioned Gilead Sciences, Inc. (NASDAQ:GILD) in its Q3 2022 investor letter. Here is what the firm has to say:
“At the stock level, biopharmaceutical company Gilead Sciences, Inc. (NASDAQ:GILD) was the top contributor in the quarter based on positive data released in a study evaluating Trodelvy versus comparative chemotherapy in patients with metastatic breast cancer. The detailed findings increased investor confidence the drug would receive incremental approvals for a broader range of breast cancer treatments. Shares also received a boost on news the TAF patent portfolio for HIV drugs will be extended from the middle of this decade through the early 2030s, thereby lengthening the company’s long-term opportunity in the virology market.”
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1. AbbVie Inc. (NYSE:ABBV)
Dividend Yield as of December 12: 3.63%
AbbVie Inc. (NYSE:ABBV) is an American biotech company that was formed after the spin-off of Abbott Laboratories in 2013. The company is one of the best dividend stocks on our list as it has been raising its payouts consistently for the past 50 years. It currently pays a quarterly dividend of $1.48 per share and has a dividend yield of 3.63%, as of December 12.
AbbVie Inc. (NYSE:ABBV) was a part of 80 hedge fund portfolios in Q3 2022, up from 71 in the previous quarter. The stakes owned by these hedge funds have a total value of over $1.86 billion. With over 3.2 million shares, Arrowstreet Capital was one of the company’s leading stakeholders in Q3.
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.”
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