In this article, we will take a look at some of the best dividend stocks in the pharma sector.

The US pharmaceutical industry has undergone notable shifts in recent years, influenced by factors such as the COVID-19 pandemic, expanded collaborations across the value chain, and ongoing changes in regulatory policies. In the first half of 2025, deal activity in the pharmaceutical and life sciences (PLS) space held steady, though with a cautious tone. Most transactions were targeted, strategic acquisitions falling within the $1–$5 billion range, according to a report by PwC. However, growing regulatory uncertainty and pressure from multiple oversight bodies have dampened confidence among dealmakers.

These developments have made revenue forecasting and valuation more complex, prompting many companies to take a more deliberate approach in reviewing pipeline projects and aligning strategic goals before moving forward with new deals.

Overall, the healthcare sector has consistently attracted investors, largely due to its strong track record of rewarding shareholders. As highlighted in a report by Janus Henderson, the global Healthcare & Pharmaceuticals industry recorded an underlying dividend growth of 3.2%. In 2024 alone, the sector distributed $138.1 billion in dividends to shareholders, marking a notable increase from the $101.5 billion paid out in 2018. Given this, we will take a look at some of the best dividend stocks in the pharma sector.

Our Methodology

In this article, we reviewed Insider Monkey’s Q1 2025 database to identify pharmaceutical dividend stocks that hedge funds favored the most. The companies listed below are ranked in ascending order based on the number of hedge fund holders in each firm.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

14. AstraZeneca PLC (NASDAQ:AZN)

Number of Hedge Fund Holders: 56

AstraZeneca PLC (NASDAQ:AZN) has a strong lineup of drugs in development, which should help it navigate upcoming patent expirations. By the end of the first quarter, it had secured around 13 drug approvals or label updates. Among its most promising experimental treatments are two potential weight management drugs, AZD5004 and AZD6234. Overall, the company is working on nearly 200 programs in its research pipeline.

In the first quarter of 2025, AstraZeneca PLC (NASDAQ:AZN) reported revenue of $13.6 billion, which showed a 7% growth from the same period last year. Total revenue has grown across all key regions, with core operating profit rising by 12%. The company is also planning to ramp up its investment in manufacturing and research in the U.S., building on its major R&D centers in Gaithersburg, Maryland, and Cambridge, Massachusetts. Overall, it is steadily moving closer to its goal of reaching $80 billion in total revenue by 2030.

AstraZeneca PLC (NASDAQ:AZN) currently pays an interim dividend of $1.03 per share and has a dividend yield of 2.25%, as of July 17. It is one of the best dividend stocks in the pharma sector as the company has been paying regular dividends to shareholders for the past 32 years.

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

Number of Hedge Fund Holders: 69

Bristol-Myers Squibb Company (NYSE:BMY) is among the best dividend stocks in the pharma sector. The company has dealt with some hurdles in the past, but it has secured several key new drug approvals in recent years. One of the most notable is Reblozyl, a treatment for anemia in individuals with beta-thalassemia, a rare blood disorder. In the first quarter, Reblozyl generated $478 million in sales, marking a 35% increase compared to the same period last year.

Bristol-Myers Squibb Company (NYSE:BMY)’s revenue for the year came in at $11.2 billion, which, though, fell by 5.6% from the same period last year, beat analysts’ estimates by $494.6 million. The company’s cash position also remained strong, with cash and cash equivalents of $10.9 billion, up from $10.34 billion at the end of December 2024.

Bristol-Myers Squibb Company (NYSE:BMY) has raised its full-year revenue forecast from around $45.5 billion to a new range of about $45.8 billion to $46.8 billion. This upward revision reflects strong results from its Growth Portfolio, stronger-than-anticipated Legacy Portfolio sales in the first quarter of 2025, and a positive foreign exchange impact of roughly $500 million.

Bristol-Myers Squibb Company (NYSE:BMY) offers a quarterly dividend of $0.62 per share and has a dividend yield of 5.18%, as of July 17. The company has been rewarding its shareholders with growing dividends for the past 16 years.

12. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 69

Amgen Inc. (NASDAQ:AMGN) is one of the best dividend stocks in the pharma sector. In 2023, the company finalized its $28 billion acquisition of Horizon Therapeutics, a smaller biotech firm. This move helped broaden Amgen’s product portfolio and reduced its reliance on older drugs like Enbrel, which are expected to weigh on future revenue and profit growth. The acquisition also brought in new growth opportunities, especially with Tepezza, the first FDA-approved treatment for thyroid eye disease.

In the first quarter of 2025, Amgen Inc. (NASDAQ:AMGN) reported revenue of $8.15 billion, which showed a 9.4% growth from the same period last year. The company reported strong global demand for its products in the first quarter. Management expressed confidence in its long-term growth outlook, citing continued success with new product launches and positive Phase 3 trial results for several treatments.

Amgen Inc. (NASDAQ:AMGN)’s free cash flow for the quarter came in at $1.0 billion, up from $0.5 billion in the prior year period. Its operating cash flow was $1.4 billion, compared to $0.7 billion in the same period last year. The company also returned $1.3 billion to shareholders through dividends during the quarter. Currently, it offers a quarterly dividend of $2.38 per share and has a dividend yield of 3.19%, as of July 17. The company has raised its payouts since the inception of its dividend policy in 2011.

11. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 70

Abbott Laboratories (NYSE:ABT) has long held a strong position in the heavily regulated healthcare industry. Over the years, it has earned the trust of both doctors and consumers, making its well-established brands more appealing in the market.

In recent years, Abbott Laboratories (NYSE:ABT)’s diabetes care division has emerged as its strongest growth engine, thanks largely to its continuous glucose monitoring (CGM) product line, FreeStyle Libre. According to the company, FreeStyle Libre has achieved record-breaking dollar sales, making it the most successful medical device in history. Despite this milestone, significant room for growth remains, as a large number of diabetics worldwide have yet to adopt CGM technology, despite its clear benefits.

In addition, Abbott Laboratories (NYSE:ABT) holds the status of a Dividend King with 53 consecutive years of dividend growth under its belt. The company has grown its dividend payouts by nearly 146% over the past ten years. With a business model designed for durability, the company is seen as a reliable option for investors seeking steady dividend growth in the years ahead. It currently offers a quarterly dividend of $0.59 per share and has a dividend yield of 1.95%, as of July 17.

10. McKesson Corporation (NYSE:MCK)

Number of Hedge Fund Holders: 70

McKesson Corporation (NYSE:MCK) is among the best dividend stocks in the pharma sector. In its fourth-quarter 2025 earnings announcement, the company revealed plans to spin off its Medical-Surgical Solutions segment into a separate entity, referred to as “NewCo.” Management emphasized that disciplined portfolio management remains a core element of its overall strategy. McKesson stated that this separation is expected to strengthen the strategic direction and operational focus of both businesses, while also delivering greater value to shareholders.

McKesson Corporation (NYSE:MCK)’s cash position came in strong in fiscal 2025. Over the full fiscal year, the company returned $3.5 billion to its shareholders, comprising $3.1 billion in share buybacks and $345 million in dividends. It reported $6.1 billion in cash flow from operations and allocated $859 million toward capital expenditures, leading to a free cash flow of $5.2 billion.

McKesson Corporation (NYSE:MCK) has been growing its payouts for eight consecutive years, and in the past five years, its dividend growth came in at nearly 12%. The company currently offers a quarterly dividend of $0.71 per share and has a dividend yield of 0.40%, as of July 17.

9. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 73

CVS Health Corporation (NYSE:CVS)’s retail pharmacy business may be widely recognized, but it represents just a small portion of its broader business. The company also runs a top-tier pharmacy benefits management division and owns Aetna, a major player in the health insurance space.

Although CVS Health Corporation (NYSE:CVS)’s stock took a significant hit last year, it has rebounded this year. The stock has surged by over 43% since the start of 2025. The company also reported strong earnings in the first quarter of 2025, with revenues coming in at $94.6 billion. The revenue showed a 7% growth from the same period last year and also beat analysts’ estimates by $1.22 billion.

CVS Health Corporation (NYSE:CVS) also posted a solid cash position with an operating cash flow of $4.6 billion. The company increased its operating cash flow forecast from around $6.5 billion to roughly $7.0 billion. This cash position has enabled the company to pay uninterrupted dividends to shareholders since 1997. Currently, it offers a quarterly dividend of $0.665 per share and has a dividend yield of 4.20%, as of July 17.

8. Zoetis Inc. (NYSE:ZTS)

Number of Hedge Fund Holders: 74

Zoetis Inc. (NYSE:ZTS) stands out as a top player in the animal health sector, offering a wide range of products for both livestock and pets. The company has built a strong reputation for innovation in the field. Recent product approvals like Solensia, introduced in 2022 for treating osteoarthritis pain in cats, and Librela, launched in 2023 for dogs, are already boosting sales. More such product launches are expected to contribute to its future growth.

Zoetis Inc. (NYSE:ZTS) reported solid performance in the first quarter of 2025, supported by strong demand for its innovative product lineup and commitment to meeting customer needs. The company attributed its 9% organic operational revenue growth to the continued dedication and agility of its workforce. Its revenue came in at $2.22 billion, which beat analysts’ estimates by $27.09 million.

Zoetis Inc. (NYSE:ZTS) is a strong dividend payer, having raised its payouts for 14 consecutive years. The company is expected to raise its dividends further because of its low payout ratio of nearly 30%. In the past five years, it has raised its payouts at an annual average rate of over 20%. Currently, it offers a quarterly dividend of $0.50 per share and has a dividend yield of 1.33%, as of July 17.

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

Number of Hedge Fund Holders: 79

Gilead Sciences, Inc. (NASDAQ:GILD) is among the best dividend stocks in the pharma sector. The company rose to prominence during the COVID-19 pandemic thanks to its antiviral drug remdesivir, one of the earliest approved treatments for the virus. However, despite its scientific breakthroughs and commercial achievements, Gilead has lagged behind the broader market over the past ten years, as investors remain cautious about its growth prospects and ability to deliver on its pipeline.

That said, Gilead Sciences, Inc. (NASDAQ:GILD)’s cash position remained stable, which makes it one of the best dividend stocks in the pharma sector. In the first quarter of 2025, the company generated $1.8 billion in operating cash flow and had $7.9 billion available in cash and cash equivalents. During the quarter, it also returned $1 billion to investors through dividends.

Gilead Sciences, Inc. (NASDAQ:GILD) currently offers a quarterly dividend of $0.79 per share and has a dividend yield of 2.90%, as of July 17. The company has raised its payouts every year since 2015.

6. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 86

AbbVie Inc. (NYSE:ABBV) stands out as a major player in the pharmaceutical industry, with a broad range of approved treatments. Among its most significant offerings are the immunology drugs Skyrizi and Rinvoq, which are expected to contribute to revenue growth well into the next decade. While these drugs will eventually face patent expirations, they highlight the company’s strong track record of managing major patent losses, an essential trait for long-term success in the sector.

Since 2013, AbbVie Inc. (NYSE:ABBV) has boosted its dividend payouts by 310%. Including its history under Abbott Laboratories, the company qualifies as a Dividend King, having raised its dividends for 53 consecutive years. From its solid business foundation to its consistent dividend growth, the company appears well-positioned to support a long-term passive income strategy.

AbbVie Inc. (NYSE:ABBV) has a strong cash position, which would help the company to pay its dividend smoothly in the future. For the trailing twelve-month period, its operating cash flow came in at $16.4 billion, and levered free cash flow was $16.94 billion. The company currently offers a quarterly dividend of $1.64 per share and has a dividend yield of 3.46%, as of July 17.

5. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 91

Johnson & Johnson (NYSE:JNJ) has long been considered one of the most dependable dividend stocks, having increased its payouts for 63 consecutive years, including a 4.8% raise earlier this year. This consistency earns it a place among the elite Dividend Kings, a group of companies with more than 50 straight years of dividend growth.

Johnson & Johnson (NYSE:JNJ)’s second-quarter results once again underscored the strength behind its dividend. During the first half of the year, the company generated roughly $6.2 billion in free cash flow after spending $6.7 billion on research and development. That amount comfortably covered its dividend obligations, which totaled $6.1 billion so far this year.

Although this suggests a relatively tight payout ratio, there appears to be little cause for concern. Free cash flow is only slightly lower compared to the $7.5 billion the company posted during the same period last year. Johnson & Johnson (NYSE:JNJ) currently offers a quarterly dividend of $1.30 per share and has a dividend yield of 3.18%, as of July 17.

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

Number of Hedge Fund Holders: 93

Merck & Co., Inc. (NYSE:MRK) is one of the best dividend stocks in the pharma sector. The company has a strong lineup of products in development and brings in solid revenue and earnings. It remains focused on innovation, with recent regulatory approvals including Winrevair, a treatment for pulmonary arterial hypertension, and Enflonsia, a vaccine targeting respiratory syncytial virus (RSV).

Merck & Co., Inc. (NYSE:MRK) reported solid earnings in the first quarter of 2025. The company’s revenue came in at $15.5 billion, down nearly 2% from the same period last year, but beat analysts’ estimates by over $198 million. Sales of KEYTRUDA rose by 4% to reach $7.2 billion, or 6% growth when adjusted for foreign exchange effects. WINREVAIR brought in $280 million in revenue. Meanwhile, Merck’s Animal Health segment saw a 5% increase in sales to $1.6 billion, and a 10% rise when excluding the impact of currency fluctuations.

In addition to these quarterly earnings, Merck & Co., Inc. (NYSE:MRK) has shown its resilience as a dividend stock. The company has been rewarding shareholders with growing dividends for the past 14 years. Currently, it offers a quarterly dividend of $0.81 per share and has a dividend yield of 4.05%, as of July 17.

3. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 99

Pfizer Inc. (NYSE:PFE) hasn’t performed well in recent years, with its stock declining more than 26% over the past decade. However, the outlook appears brighter, thanks to its strong pipeline of drugs currently in development. Much of the negative sentiment seems to be already reflected in its depressed share price. Recently, the company’s forward P/E ratio stood at 8.3, which is noticeably lower than its five-year average of 10.2.

Pfizer Inc. (NYSE:PFE) reported mixed earnings in the first quarter of 2025. The company posted revenue of $13.7 billion, down 8% on a YoY basis. The revenue also missed analysts’ estimates of $335.8 million; however, its EPS of $0.92 beat the consensus by $0.25. The company noted that its emphasis on operational efficiency and financial discipline has been contributing positively to its bottom line. It further stated that performance is currently tracking toward the higher end of its 2025 adjusted diluted EPS guidance range.

Pfizer Inc. (NYSE:PFE)’s strong balance sheet allowed it to return $2.4 billion to shareholders through dividends during the quarter. The company has raised its payouts for 15 years in a row. It offers a quarterly dividend of $0.43 per share and has a dividend yield of 7.03%, as of July 17.

2. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Holders: 101

Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the best dividend stocks in the pharma sector. The stock is down by over 21% since the start of 2025; however, it continues to be a strong long-term growth company, supported by its large scale, diverse operations, and steady high-margin recurring revenue streams, which make up 83% of its total sales. At its foundation, the company is a leading supplier of instruments, diagnostics, bioproduction tools, and outsourced clinical and manufacturing services.

In the first quarter of 2025, Thermo Fisher Scientific Inc. (NYSE:TMO) reported revenue of $10.36 billion, up nearly 1% from the same period last year. The revenue also beat analysts’ estimates by $130 million. The company relied on the PPI Business System to enhance operational efficiency and support its customers’ success. It also made progress on its established growth strategy by rolling out several impactful and innovative products during the quarter.

Thermo Fisher Scientific Inc. (NYSE:TMO) is a solid dividend payer with a robust cash position. In the most recent quarter, the company generated an operating cash flow of $723 million, and its free cash flow was $373 million. In February, it raised its dividend for the eighth consecutive year. It offers a quarterly dividend of $0.43 per share and has a dividend yield of 0.42%, as recorded on July 17.

1. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 119

Eli Lilly and Company (NYSE:LLY) is among the best dividend stocks in the pharma sector. In the past five years, the company has raised its payouts at an annual average rate of 16%. Its consistent track record makes it an appealing choice for investors focused on dividend growth, especially given the strength of its broader operations. A company’s ability to sustain dividends depends on its overall stability, and Eli Lilly stands out as one of the most solid players in the pharmaceutical space today. It holds a leading position in the rapidly expanding weight loss segment.

Eli Lilly and Company (NYSE:LLY) also has a promising pipeline, with several potential blockbuster drugs that could each generate over $1 billion in annual revenue. Its revenue and earnings have been rising at a pace that surpasses many of its peers, a trend expected to continue in the coming years. As a result, investors who remain patient could benefit from steady dividend increases as well as long-term stock gains.

On June 23, Eli Lilly and Company (NYSE:LLY) declared a quarterly dividend of $1.50 per share, which was in line with its previous dividend. Overall, the company has been growing its payouts for 11 consecutive years. As of July 17, the stock has a dividend yield of 0.77%.

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