James Hardie Industries plc (ADR) (NYSE:JHX)’s business in Australia is growing at a slow pace after recent interest rate cuts. Due to previously high interest rates, there was a decrease in the level of residential construction activity. Recent interest rate cuts will provide an upside in the housing count that should result in an increase to 151,457 units in 2014 from 135,566 this year. With sustainable recovery, the company expects to generate revenue of $74.9 million in this year and $81.5 million in 2014.
Cardiovascular disease pipeline to benefit from acquisition
Recently, AstraZeneca plc (ADR) (NYSE:AZN) acquired Omthera Pharmaceuticals for $323 million and Contingent Value Rights for $120 million. This acquisition will strengthen AstraZeneca plc (ADR) (NYSE:AZN)’s cardiovascular disease pipeline with the addition of Epanova, an anti-triglyceride medicine based on fish oil. Omthera filed for FDA approval for treating patients with high triglycerides with Epanova. If it receives approval, AstraZeneca plc (ADR) (NYSE:AZN) will benefit as the drug has the potential to generate peak sales of $1 billion after commercial launch in coming years.
Currently, the company indicates an under-performing trend, as some segments have not shown the expected rise, which will likely improve in the future with the recent acquisitions and other drugs in trial phase. Therefore, AstraZeneca plc (ADR) (NYSE:AZN) may give less in dividends in the next one to two years, but that should change in the long term.
Conclusion
AstraZeneca plc (ADR) (NYSE:AZN) is currently under-performing, but with the new acquisition and other drugs in trial phase, it should perform better. China Petroleum & Chemical Corp (ADR) (NYSE:SNP) will continue to benefit from the new pricing system and asset acquisition will strengthen its overseas portfolio. This will lead to high margins and revenue in the coming years. The improving U.S. housing market will continue to generate revenue for James Hardie Industries plc (ADR) (NYSE:JHX). On the other hand, the company’s business in Australia might grow at a slower pace with changes in interest rates. Therefore, I recommend a buying these stocks.
The article 3 Companies With Dividend Yields You Don’t Want to Miss originally appeared on Fool.com and is written by Madhukar Dubey.
Madhukar Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Madhukar 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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