3 Super Dividend Healthcare Stocks: PDL BioPharma, GlaxoSmithKline, AstraZeneca

Page 1 of 2

The financial uncertainty in our debt markets has increased the attractiveness of high dividend stocks. Moreover, international markets are showing no sign of immediate recovery, and financial uncertainty will continue well into 2013. I recommend that investors looking for regular streams of income buy dividend stocks, but only those which have strong fundamentals. The following 3 companies offer a high yield, and analysis shows their dividend is sustainable.

PDL BioPharma Inc. (NASDAQ:PDLI)

PDL BioPharma (NASDAQ:PDLI)

PDL is a little different from other healthcare companies. It is primarily an IP asset management company that aims to distribute wealth through dividends, of its royalty bearing assets. The Nevada-based company offers patents covering different aspects of humanizing antibodies. The company currently offers an 8% dividend yield and has a payout ratio of 43%.

The most interesting aspect of PDL’s dividend is its suitability, due to its unique model. The company basically pays back the royalties it collects in the form of a dividend; therefore it bears no risk itself. The financial position of the company is sound, with the current ratio approximately 30% above the industry average. Moreover, the stock is currently trading at a P/E of 4.7x and a mean sell side price estimate is $6.90. I believe PDL’s dividend is sustainable, and it is a good dividend play.



PDLI data by YCharts

GlaxoSmithKline (NYSE:GSK)

GlaxoSmithKline is one of the world’s largest pharmaceutical companies, and has a market cap of more than $100 billion. The company is involved in the discovery and commercialization of various pharmaceutical products. It offers treatments for HIV, CNS (Central Nervous System) diseases, cardiovascular diseases, metabolic, respiratory diseases, vaccines, etc. GSK has a forward annual dividend yield of 5.2%, which is more than twice industry average and the highest amongst big pharmaceuticals.

On the downside, the payout ratio is pretty high (77%) and the company is also highly leveraged. However, the operating cash flow yield is 5.7% and is above the dividend yield, which shows that at these levels its dividends are sustainable. The stock is currently trading at a P/E of 11.6x, which is well below the NYSE average of 18x and has a 10% upside, based on mean sell side estimates. Therefore I believe it’s a good buy for dividend and capital gains.



GSK data by YCharts

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!