AstraZeneca plc (ADR) (AZN), Select Medical Holdings Corporation (SEM), Meridian Bioscience, Inc. (VIVO): Three High Dividend Healthcare Stocks

Diagnostic Substances Industry

Meridian Bioscience, Inc. (NASDAQ:VIVO) is a life sciences company which is involved in the development and commercialization of clinical diagnostic tests kits for respiratory, parasitic and gastrointestinal diseases. Its major products include, C. difficile, Rotavirus, Adenovirus, H. pylori, Campy etc.

Meridian Bioscience, Inc. (NASDAQ:VIVO) offers a dividend yield of 3.5% which is more than 3 times the industry average. The forward P/E of 22x is also below industry average P/E of 30x. The company generates approximately 43 million from cash flows which gives us an approximate OCF yield of 4% i.e. 0.5% above the dividend yield.

The street expects Meridian Bioscience, Inc. (NASDAQ:VIVO) to show 5- year average earnings growth of 13.3% which is 25% above the market average. If we use the mean EPS estimate and industry average p/e multiple, we can calculate a 2014 target price of $27 i.e. 25% upside on current price levels. These cheap valuations and high dividend yield makes Meridian Bioscience, Inc. (NASDAQ:VIVO) an attractive investment for dividends and capital appreciation.

Bottom-line

These three companies have a stellar dividend yields and protection of an even higher OCF yield. The healthcare industry usually has a high earnings visibility because drugs/treatments are protect by patents. These are excellent dividend investments for investor looking for a stable stream of income.

The article 3 High Dividend Healthcare Stocks originally appeared on Fool.com and is written by Mohsin Saeed.

Mohsin Saeed has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Mohsin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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