However, it also reported that its Phase III clinical trials for TYKERB/TYVERB (lapatinib) did not meet the primary endpoint. TYKERB/TYVERB is a combination drug with chemotherapy for advanced HER2-positive gastric cancer. Nonetheless, GlaxoSmithKline has many other drug candidates in its pipeline under every phase of the clinical trial. This keeps the company on solid ground in the future.
Pfizer Inc. (NYSE:PFE)
Strong dividend yield of 3.39%.
Pfizer’s current yield still outperforms the average yield of U.S. Treasuries. This makes it an attractive but safe investment medium. Pfizer’s annualized dividend is $0.96, evenly distributed per quarter at $0.24 per share. The annualized dividend has been increasing year-over-year since 2009.
Pfizer is trying to position itself as an innovative biopharmaceutical company. It recently announced its plan for a split-off of Zoetis, its animal health business. As part of its plan, the firm will be offering shareholders the option of a tax-free exchange (common stock of Pfizer can be exchanged for Zoetis shares). Pfizer aims to complete the full separation of Zoetis by 2014.
Nonetheless, the split-off of Zoetis gives Pfizer more focused operation. This move is expected to improve the performance of the company both in financials and in the stock market.
Merck & Co., Inc. (NYSE:MRK)
Attractive annual yield of 3.67%.
Merck is a large-cap biotech stock with a good dividend profile. The annualized dividend is $1.72, up from the fixed annualized dividend of $1.52 it paid during 2005 to 2010.
On May 21, Merck announced the $5 billion accelerated share repurchase agreement with Goldman Sachs Group. This is a sign that foretells the rising confidence of the management on the firm’s future success. It was also a demonstration of Merck’s commitment to deliver enhanced value to the shareholders.
As of May 6, 2013, Merck has about 23 drug candidates under Phase II clinical trials. It also has 15 drug candidates under Phase III trials and six drug candidates under review. With so many products in the pipeline, Merck remains stable with a lucrative future outlook on top of the attractive dividend yield.
Summary
The high volatility of the biotech and pharmaceutical market is also a good source of opportunities. You can make profits when shares soar after news releases on FDA approvals, successful product launches, and outstanding product sales. On the downside, shares will also plummet if drug candidates undergoing clinical trials are not approved by the FDA.
Strong market capitalization is just one of the filters to minimize your risk. You can add other filters like year-over-year revenue and net income growth, debt-to-equity ratio, and earnings per share, among others. Nonetheless, the above biotech companies are among those you can count on in terms of earnings from shares and dividends. They are also less risky compared to small- to medium-cap companies.
Nur Tarkak has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article 5 Biotech Giants with Lucrative Dividend Yields originally appeared on Fool.com.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
