Allergan, Inc. (AGN): Is It Worth Looking At?

Novartis got sued

Novartis AG (NYSE:NVS) is also has a lower EV multiple than Allergan, Inc. (NYSE:AGN). The company is trading at $73.50 per share, with the total market cap of $180.6 billion. The company is valued at 11.4 times EV/EBITDA. According to the New York Times, at the end of April, Novartis was sued by the U.S. government, accusing the company of paying millions in kickback money to doctors in exchange for its drugs, including hypertension drugs Lotrel and Valturna, and the diabetes drug Starlis, being prescribed. In return, Novartis AG (NYSE:NVS)’ spokeswoman Julie Masow commented that Novartis would dispute the claims and defend itself.

Even after the legal issues, Novartis AG (NYSE:NVS)’ share price has consistently kept going up to nearly $73.50 per share. In February, it paid out more than $2.40 per share in dividends. Thus, the dividend yield stays at nearly 3.3%. Johnson & Johnson offers investors a bit lower dividend yield at 3.1% while the dividend yield for Allergan, Inc. (NYSE:AGN) is very small, at only 0.2%.

My Foolish take

Investing in the pharmaceutical industry is not easy. The results of the potential future pipelines of each company are uncertain. If potential growth is factored in, Allergan, Inc. (NYSE:AGN) seems to be the best pick with the lowest PEG at only 1.57% while the PEG ratios for Johnson & Johnson (NYSE:JNJ) and Novartis AG (NYSE:NVS) are much higher, at 2.42% and 2.73%, respectively. However, investors might feel much safer with Johnson & Johnson and Novartis because of their huge sizes, market leading positions and decent dividend yields.

The article Should We Get Bullish on This Fast Growing Healthcare Company? originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.