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

Published on January 17, 2013 at 3:32 pm by The Motley Fool in Dividend Stocks

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AstraZeneca (NYSE:AZN)

AstraZeneca has the second highest dividend yield in the healthcare industry at 5.85% percent, and has a market capitalization of approximately $60 billion. It is involved in the discovery and commercialization of biopharmaceutical products, with a focus on prescription medicine for cardiovascular, respiratory, neuroscience, oncology, gastrointestinal, inflammation etc.

The company has been facing headwinds due to patent expiry of its start drug Seroquel IR, which contributed approximately 16% to its total sales. After the patent expiry, the sales of Seroquel IR fell approximately 95%, inducing a 19% sales decline last quarter for AstraZeneca. Despite these issues it still has an operating cash flow yield of 26%, which is way higher than its dividend yield of 5.85%, making its dividend yield sustainable.

The stock is currently trading at a P/e of 8x and approximately equal to its sell side mean estimates of $47.5. I believe that despite the headwinds, AstraZeneca’s yield is sustainable and it is ideal for investors looking for a regular income stream.

The article 3 Super Dividend Healthcare Stocks originally appeared on Fool.com.