Merck & Co., Inc. (MRK), Pfizer Inc. (PFE): Juicy Dividends From the Three Pharmaceutical Giants

Novartis has the highest valuation

One of their peers, Novartis AG (ADR) (NYSE:NVS), is the most expensively valued among the three. At $71.80 per share, Novartis is worth around $176.4 billion. The market values Novartis AG (ADR) (NYSE:NVS) at as high as 11.2 times EV/EBITDA. Recently, the company presented encouraging results from its pivotal Phase III trial of Afinitor (everolimus) tablets. It reported that Afinitor had ability to restrain the tumor growth in HER2 positive advanced breast cancer. Ruth O’regan, a professor in Emory University School of Medicine, the lead study author, said

These encouraging data demonstrate that everolimus has a meaningful impact in heavily pretreated HER2 positive advanced breast cancer patients. Everolimus works differently than available treatment options for HER2 positive advanced breast cancer by inhibiting mTOR, and may offer an important new option for physicians and their patients.

With a $50 billion acquisition of global eye care leader Alcon, Novartis’ leverage level has risen significantly. As of March 2013, Novartis still carried more than $11.6 billion in debt, which means that Merck still has the strongest balance sheet among the trio.

My Foolish take

With the global leading position and juicy dividend yields, all three of these large pharmaceutical firms seem to fit well in long-term portfolio of investors. Patent expiration could have short-term negative effects on any of these companies. However, the most important thing is their strong financial resources would allow them to spend significant amount on their R&D to move forward their drug pipelines.

Can Merck beat the patent cliff?

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Juicy Dividends From the Three Pharmaceutical Giants originally appeared on Fool.com and is written by Anh HOANG.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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