The Best Dividend in Big Pharma: Sanofi SA (SNY), Pfizer Inc. (PFE), GlaxoSmithKline plc (GSK)

However, Sanofi’s got one step ahead of everyone else in big pharma in one of the future’s juiciest areas: emerging markets. Sanofi racked up nearly 32% of 2012 sales from emerging markets, recording growth of more than 8% and reaching from Africa to Asia to Latin America. GlaxoSmithKline, as an example of a competitor, is still moving about resources to target emerging markets; Sanofi’s existing profile gives it a key advantage on rivals yet to make a dent in developing economies that will wield tremendous revenue power in the future.

Sanofi’s current business model also offers advantages for income investors. Rather than dumping business units a la Abbott Laboratories (NYSE:ABT)‘s offload of AbbVie and Pfizer’s spinoff of animal health unit Zoetis Inc (NYSE:ZTS), Sanofi’s portfolio stretches from pharmaceuticals to animal health to consumer health and more. These segments have evolved as major drivers of growth — consumer health alone picked up nearly 10% growth in 2012 — and company CEO Chris Viehbacher sees opportunities to diversify in diagnostics and medical devices as well.

That diversification will protect Sanofi from patent expirations and other events that hit individual health care industries. While it could weigh on growth in the future, diversification makes this stock a safer pick than its more specialized rivals.

There are threats to Sanofi, of course. There’s no telling how bad the Lantus patent expiration will hit in a few years, and the company’s establishment in France means its exposure to Europe’s myriad of economic woes hurts more than less-exposed rivals. Sanofi’s emerging market experience and expansion should help mitigate that effect, however; the company’s even gone as far as growing its animal health business in India, a testament to just how committed Sanofi is to securing its sales of the future.

If the plan works out, Sanofi will have plenty of financial legroom to keep paying — and growing — its dividend in years to come.

A strong shot for the long term
Sanofi might not be the most glamorous pick for income investors, but this company’s strong dividend yield, diversification, and maneuvering for the future make it one to watch. Investors have worried about the company’s downbeat expectations for 2013 profits, but the best income investors know to look for companies set for the long haul. With a full load of branded drugs to anchor future sales and a superb presence in emerging markets, Sanofi’s got the right tools to build a bright tomorrow. This is one dividend that’s not going to keep you up at night.

The article The Best Dividend in Big Pharma originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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