10 Healthcare Dividend Stocks with Over 3% Yield

In this article, we discuss the 10 healthcare dividend stocks with over 3% yield. If you want to skip our detailed analysis of these stocks, go directly to the 5 Healthcare Dividend Stocks with Over 3% Yield

In a post COVID-19 world, the healthcare sector adopted some trends that are here to stay. First, the automation of healthcare services peaked when doctors, nurses, and support staff were overwhelmed with patients in the ER and the coronavirus wards, and they delegated secondary tasks like checking patient history and manual administrative tasks to digital assistants and apps that guide patients through the earliest stages of the care process.

Second, pharmacies like CVS and Walgreens Boots Alliance, Inc. (NASDAQ:WBA) are working to make healthcare a one-stop shop for patients, with in-house doctors who treat patients on the go, without extensive appointments and paperwork hassles, and they can get medicines on the way out. Another lasting trend is telehealth, with customers feeling more comfortable adopting online healthcare options ever since remote work and education normalized the virtual experience for most people, and companies like Teladoc Health, Inc. (NYSE:TDOC) and American Well Corporation (NYSE:AMWL) benefited greatly from the major shift to virtual healthcare. 

Even though the healthcare industry is one of the largest US market segments by market capitalization after the technology and finance sectors, healthcare stocks aren’t entirely popular for their dividend payouts, despite being one of the leading segments of the S&P 500 Index. The healthcare sector is known for being the lowest yielding segment, with an average forward yield of only 0.55%. Drug delivery companies and drug manufacturers are the key dividend players in the healthcare subcategories, reporting an average yield of 2.22% and 1.98%, respectively. 

Some of the highest paying healthcare stocks with a dividend yield of over 3% include Amgen Inc. (NASDAQ:AMGN), Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and GlaxoSmithKline plc (NYSE:GSK), in addition to other companies that will be discussed later in the article. 

Photo by Karolina Grabowska from Pexels

Our Methodology 

To create a list of healthcare dividend stocks, we screened for companies that paid a dividend of more than 3% and had mostly positive analyst ratings. We ranked the companies in ascending order, according to their dividend yields. 

Insider Monkey tracks the movement of 867 elite hedge funds as of the third quarter of 2021. We have mentioned the hedge fund sentiment around each stock to reflect a company’s popularity with the smart money. 

Healthcare Dividend Stocks with Over 3% Yield

10. Bristol-Myers Squibb Company (NYSE:BMY)

Dividend Yield as of December 13: 3.32%

 

Number of Hedge Fund Holders: 74

Bristol-Myers Squibb Company (NYSE:BMY) is one of the most popular healthcare dividend stocks among the smart money, with 74 hedge funds tracked by Insider Monkey holding stakes in Bristol-Myers Squibb Company (NYSE:BMY), worth $4.75 billion at the end of September. This is compared to 73 funds in the preceding quarter, with a total stake value of $5.20 billion. 

Bristol-Myers Squibb Company (NYSE:BMY) is a global leader in its category, engaged in research and development of medicines for therapeutic focus areas including oncology, hematology, immunology, and cardiovascular disease. 

Bristol-Myers Squibb Company (NYSE:BMY) announced on December 13 a $0.54 per share quarterly dividend, which reflects a 10.20% increase from its prior quarter dividend of $0.49. The dividend will be payable on February 1, 2022 to shareholders of record on January 7, 2022. 

On October 27, Bristol-Myers Squibb Company (NYSE:BMY) reported Q3 earnings, posting an EPS of $2, exceeding estimates by $0.08. Revenue over the period totaled $11.62 billion, jumping 10.28% year-over-year, outperforming estimates by $100.06 million. 

Wells Fargo analyst Mohit Bansal on December 8 initiated coverage of Bristol-Myers Squibb Company (NYSE:BMY) with an Equal Weight rating and a $58 price target, stating that lost patents could be challenging for the company. 

Warren Buffett’s Berkshire Hathaway is the leading shareholder of Bristol-Myers Squibb Company (NYSE:BMY), with more than 22 million shares worth $1.30 billion at the end of the third quarter. 

Bristol-Myers Squibb Company (NYSE:BMY) is an attractive healthcare dividend stock, just like Amgen Inc. (NASDAQ:AMGN), Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and GlaxoSmithKline plc (NYSE:GSK). 

Wedgewood Partners mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its Q4 2020 investor letter. Here is what they had to say: 

“Bristol-Myers Squibb recently reported accelerating sales as much of the medical services industry returned to work. The Company continues to expect double-digit earnings growth over the next few years, driven by existing drugs, in addition to a broad pipeline of new drugs and indications. While the market remains fixated on a couple of patent expirations that could occur over the next several years, we think this is well-known at this point, yet the market still undervalues a couple of key acquisitions the Company has made in the past few years, particularly Celgene, which was acquired for a song.”

9. Viatris Inc. (NASDAQ:VTRS)

Dividend Yield as of December 13: 3.51%

 

Number of Hedge Fund Holders: 55

In the third quarter earnings published on November 8 by Viatris Inc. (NASDAQ:VTRS), a Pennsylvania-based global healthcare company, the EPS totaled $0.99, beating estimates by $0.11. The $4.54 billion revenue jumped 52.64% year-over-year, exceeding estimated revenue by $144.16 million. 

Viatris Inc. (NASDAQ:VTRS) offers generic and branded drugs, in addition to secondary services including diagnostic clinics, educational seminars, and digital tools to help patients better manage their health. The therapeutic focus areas at Viatris Inc. (NASDAQ:VTRS) are cardiovascular health and oncology, as well as a wide variety of noncommunicable and infectious diseases. 

India’s largest biopharmaceutical company, Biocon Biologics, and Viatris Inc. (NASDAQ:VTRS) are rumored to merge their biosimilars business to achieve scale and unlock value, even though neither company has commented on the market speculation. Following the news of a potential merger, Evercore ISI analyst Umer Raffat on December 9 stated that “conceptually” he can see why Viatris Inc. (NASDAQ:VTRS) would consider such a deal given that it has not been given much credit for its biosimilars growth potential. The analyst observed that the stock is “very dislocated” at its current valuation and he expects the stock price to reach “low $20s+” per share and maintained an Outperform rating on Viatris Inc. (NASDAQ:VTRS).

A total of 55 hedge funds in the Q3 database of Insider Monkey were bullish on Viatris Inc. (NASDAQ:VTRS), up from 53 funds in the preceding quarter. Laurion Capital Management is the largest Viatris Inc. (NASDAQ:VTRS) stakeholder, with 33.74 million shares valued at $457.23 million. 

Here is what Davis Opportunity Fund has to say about Viatris Inc. (NASDAQ:VTRS) in its Q3 2021 investor letter:

“Also within healthcare, we own Viatris, the newly conceived union of Mylan, a generics/specialty pharma company, and Pfizer’s Upjohn business, which includes a portfolio of 20 largely off-patent branded Pfizer drugs including Lipitor, Lyrica, Norvasc and Viagra. The combined business is the largest generics/off-patent drug manufacturer in the world and is highly diversified by geography, with 70% of revenue outside the U.S.”

8. Amgen Inc. (NASDAQ:AMGN)

Dividend Yield as of December 13: 3.67%

 

Number of Hedge Fund Holders: 52

Amgen Inc. (NASDAQ:AMGN) is one of the best healthcare dividend stocks with a 3.67% forward yield, declaring a per share quarterly dividend of $1.94 on December 3, which represents a 10.2% increase from the $1.76 dividend per share in the preceding quarter. Amgen Inc. (NASDAQ:AMGN) will distribute the dividends on March 8, 2022, to shareholders of record on February 15, 2022. 

A leading multinational biotechnology company, Amgen Inc. (NASDAQ:AMGN) is studying advanced human genetics to unfold the complexities of unique diseases and create a pipeline of medicines with groundbreaking potential.

On November 2, Amgen Inc. (NASDAQ:AMGN) reported earnings for the third quarter, posting earnings per share of $4.67, exceeding estimates by $0.45. The quarterly revenue was up 4.41% from the prior-year quarter, amounting to $6.71 billion, beating estimates by $15.60 million. 

Wells Fargo analyst Mohit Bansal initiated coverage of Amgen Inc. (NASDAQ:AMGN) on December 8 with an Equal Weight rating and a $210 price target. According to the analyst, Amgen Inc. (NASDAQ:AMGN) stock appears to be fairly valued, however, the pricing pressure will likely create pressure on margins. 

In the third quarter of 2021, 52 hedge funds were bullish on Amgen Inc. (NASDAQ:AMGN), with total stakes valued at $1.4 billion. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest stakeholder of Amgen Inc. (NASDAQ:AMGN) as of September this year, increasing its stake in the company by 45% in Q3, holding 1.85 million shares worth almost $394 million.

Here is what Saturna Capital Amana Funds has to say about Amgen Inc. (NASDAQ:AMGN) in its Q3 2021 investor letter:

“Amgen has been on the bubble, but stands as a prodigious generator of cash, pays an attractive dividend yield, and its growth prospects appear to be improving. Valuation is also attractive, especially considering it features one of the cleaner profit and loss statements in terms of comparing earnings under Generally Accepted Accounting Principles (GAAP) to non-GAAP earnings. The latter often exists to flatter the company’s outlook.”

7. Merck & Co., Inc. (NYSE:MRK)

Dividend Yield as of December 13: 3.76%

 

Number of Hedge Fund Holders: 77

At the end of September, 77 hedge funds tracked by Insider Monkey were long Merck & Co., Inc. (NYSE:MRK), one of the best healthcare dividend stocks, with total stakes worth $4.55 billion. Fisher Asset Management is the largest Merck & Co., Inc. (NYSE:MRK) stakeholder from the third quarter, with the hedge fund increasing its position in the company by 4%, holding 10.63 million shares worth $798.6 million. 

Merck & Co., Inc. (NYSE:MRK), on October 28, posted earnings for the third quarter. The reported EPS came in at $1.75, beating estimates by $0.20. Revenue over the period gained 4.80% as compared to the previous year quarter, reaching $13.15 billion, outperforming estimates by $833.53 million. 

Wells Fargo analyst Mohit Bansal on December 8 initiated coverage of Merck & Co., Inc. (NYSE:MRK) with an Overweight rating and a $90 price target. The analyst views the growth of one of Merck & Co., Inc. (NYSE:MRK)’s drugs, Keytruda, as underappreciated and expects a $2 billion upside potential to consensus estimates by 2025. 

Here is what Artisan Partners has to say about Merck & Co., Inc. (NYSE:MRK) in its Q1 2021 investor letter:

“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”

6. Gilead Sciences, Inc. (NASDAQ:GILD)

Dividend Yield as of December 13: 4.02%

 

Number of Hedge Fund Holders: 55

Gilead Sciences, Inc. (NASDAQ:GILD) is an American biopharmaceutical company specializing in the development of antiviral drugs used in the treatment of HIV, hepatitis B, hepatitis C, and influenza. 

Gilead Sciences, Inc. (NASDAQ:GILD) reported solid Q3 earnings on October 28, posting an EPS of $2.65, beating estimates by $0.87. The quarterly revenue increased 12.83% to $7.43 billion, surpassing estimates by $1.09 billion. 

Renaissance Technologies increased its stake in Gilead Sciences, Inc. (NASDAQ:GILD) by 9% in the third quarter, and is the leading company stakeholder with 5.5 million shares worth $384.2 million. Overall, 55 hedge funds monitored by Insider Monkey in Q3 2021 were long Gilead Sciences, Inc. (NASDAQ:GILD), up from 54 funds in the preceding quarter. 

Gilead Sciences, Inc. (NASDAQ:GILD) is a good investment if investors are looking for healthcare dividend stocks to diversify their portfolio, in addition to Amgen Inc. (NASDAQ:AMGN), Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and GlaxoSmithKline plc (NYSE:GSK).

 

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Disclosure: None. 10 Healthcare Dividend Stocks with Over 3% Yield is originally published on Insider Monkey.