Allergan, Inc. (AGN), Dr. Reddy’s Laboratories Limited (ADR) (RDY): Should These Drug Companies Pay a Dividend?

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Why yes, yes it should. The profit margins are strong, this is already a $93 billion company and it’s only trading around 24 times earnings. So the days of super growth may be behind Novo. And that’s okay, because it can still be a decent deal and a great little money machine.

The Foolish bottom line

Dividends are great, but a dividend applied at the wrong time or when the money is needed elsewhere can be very destructive. A company should pay a dividend when it can commit to paying a reasonable amount and when its time of greatest growth is in the past.

Chris Hodge has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Should These Drug Companies Pay a Dividend? originally appeared on Fool.com.

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