Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Pfizer Inc. (PFE), Merck & Co., Inc. (MRK), Teva Pharmaceutical Industries Ltd (ADR) (TEVA): Four Big Drug Companies With Big Juicy Yields

3 Drug Launches You Need to Know in 2013: Pfizer, NPS Pharma, Ariad PharmaDrug companies have been revenue generating machines for long. They’re in the enviable position of being able to profit from the aging of America by providing a product that will be in continuous demand. While those revenue streams can hit some peaks and troughs due to things like drug patent expiration (something that Pfizer Inc. (NYSE:PFE) will be dealing with shortly with its big name drug Lipitor), the big pharma companies are usually able to develop a pipeline of new drugs to keep those revenue streams flowing.

Because of that ability to generate cash flow, health care stocks are known for returning some of that capital to shareholders in the form of dividends. Some of the biggest drug makers in the market today are offering some impressive dividend yields to go along with their potential for growth.

Here are four great examples.

As mentioned above, Pfizer Inc. (NYSE:PFE) is facing some issues with its drug pipeline. Lipitor is now off patent and the company is still looking for the next big drug to replace its revenue stream. Pfizer Inc. (NYSE:PFE) recently delivered a disappointing first quarter, but if the company delivers on some of the late stage drugs it has in development, revenue could begin looking solid again sooner rather than later.

Pfizer is looking to gain footing in the diabetes market with the development of ertugliflozin and the company is poised to bring its anticlotting drug Eliquis to the market shortly. Plus, it remains to be seen how Pfizer Inc. (NYSE:PFE)’s decision to sell Viagra online will affect sales.

Pfizer Inc. (NYSE:PFE) is one of the biggest drug companies out there and its 32% operating margin is among the best in the industry. Buy and hold investors may experience some short-term bumps on the road but a 3.10% dividend yield is a nice consolation as they wait.

Emerging markets like China are proving to be a big boon for Merck & Co., Inc. (NYSE:MRK) as evidenced by the region’s 6% year over year growth. That growth is helping soften the blow of an overall 9% year over year revenue decline that’s been affecting the company’s bottom line.

While the company has experienced some recent setbacks — diabetes drug Januvia had lackluster sales while asthma drug Singulair saw its patent expire — there’s reason for optimism. The company has agreements in place with Pfizer Inc. (NYSE:PFE) for the development of another diabetes drug and with Bristol-Myers Squibb on a hepatitis C drug that could end up proving to be quite lucrative.

In the meantime, the company maintains a reasonable P/E ratio of 12 and a solid 3.80% dividend yield.

With pharmaceutical companies, you often hear the term “patent cliff” that refers to the lost revenue associated with drugs going off patent. Most companies face it to some degree, but Eli Lilly & Co. (NYSE:LLY) may face a steeper cliff than most.

The company will lose patents on two of its major drugs in 2013 — anti-depression drug Cymbalta and insulin drug Humalog. Those two drugs resulted in combined revenue of almost $7.5 billion last year.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.