Healthcare stocks have rallied over the past couple years, and for good reason. Not only is the global economy gaining traction, but the demographic trends, particularly in the United States, are extremely favorable. It’s a cliché by now, but it’s still true, that America is an aging society. The Baby Boomer generation is rapidly approaching retirement, and in turn will require a great deal of healthcare services.
As a result, when many investors view healthcare stocks, they tend to focus on the U.S. pharmaceutical giants. While those companies are certainly worthy of investment consideration, there happen to be foreign companies with significant exposure to the U.S. economy that are equally worthy of your investment dollars.
Profits from across the pond
You may not know these international pharmaceutical giants, but they have the same characteristics that make their American counterparts so attractive: namely, steady fundamentals and hefty dividend yields.
In some cases, these healthcare giants may actually provide more in terms of yield than their U.S. peers. For example, AstraZeneca plc (ADR) (NYSE:AZN) carries one of the biggest yields among the publicly-traded big pharma stocks.
Based in the United Kingdom, AstraZeneca plc (ADR) (NYSE:AZN) might not sound familiar to many investors, but many of its key products probably ring a bell. Among the company’s better known drugs are Crestor, Nexium, and Atacand.
As previously mentioned, perhaps the best feature of owning AstraZeneca plc (ADR) (NYSE:AZN) is its massive dividend. The company pays a semi-annual dividend, which yields close to 6% annualized.
Furthermore, AstraZeneca plc (ADR) (NYSE:AZN) isn’t expensively valued. Whereas many U.S. pharmaceutical giants trade close to 20 times trailing earnings, AstraZeneca plc (ADR) (NYSE:AZN) changes hands for a much more attractive 10 times trailing EPS.
Other international candidates for your watch list are Novartis AG (ADR) and Sanofi SA (ADR) (NYSE:SNY). Both of these companies are giants, with the market values and dividends to prove it.
Novartis AG (ADR) is based in Switzerland and has a long history, founded all the way back in 1895. The company holds a $173 billion market capitalization.
Novartis AG (ADR) reported mixed full-year 2012 results. Sales were flat on a constant currency basis, but core earnings per share dropped 3% versus the prior year. However, Novartis AG (ADR) was pleased with its performance amid the challenging 2012 economy and provided investors with the 16th consecutive annual dividend increase. The company’s current payout yields 3.5% at recent prices.