Attractive Income Opportunities in Healthcare
Investing in dividend stocks can be a wise strategy, especially when considering companies with strong underlying operations that can sustain increasing payouts over time. Two healthcare companies, CVS Health (NYSE: CVS) and Bristol Myers Squibb (NYSE: BMY), offer promising opportunities for investors focused on the long game.
CVS Health: Overcoming Challenges
Despite facing issues such as slow revenue growth, inconsistent net income, and multiple guidance cuts, CVS Health remains an attractive option. The company’s diversified and complementary services, including primary care, health insurance, and medicines, provide a solid foundation. Additionally, its presence in dozens of communities across the U.S. and its ability to adapt to changing market conditions are significant advantages.
CVS Health is addressing its Medicare Advantage business issues and has promised to restructure the business next year, which could lead to increased efficiency. The company’s subsidiary, Cordavis, focused on developing generic and biosimilar medicines, has the potential to become a lucrative endeavor. With an aging population, demand for CVS Health’s services is likely to increase.
The company’s dividend yield stands at 4.8%, and it has raised its payouts by 90% over the past 10 years, making it a reliable dividend payer.
Bristol Myers Squibb: A Resilient Pharmaceutical Giant
Bristol Myers Squibb has recovered from declining sales following the loss of exclusivity for Revlimid, thanks to newer approvals. The company’s revenue increased by 8% year over year to $11.9 billion in the third quarter, and its adjusted EPS decreased by 10% due to acquisition-related expenses.
While facing patent cliffs for two of its best-selling medicines, Eliquis and Opdivo, Bristol Myers Squibb has proven its ability to overcome such challenges. Its portfolio of new approvals features medicines with growing sales potential, and its pipeline includes 51 compounds in development across several therapeutic areas.
The company’s dividend yield recently topped 4.4%, and its payouts have grown by more than 62% over the past 10 years, making it a solid income stock.
Investing in the Future
Both CVS Health and Bristol Myers Squibb offer attractive income opportunities for investors willing to take a long-term view. By investing in these companies, investors can benefit from their strong underlying operations, diversified services, and commitment to innovation.
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