Visa Inc (V), Apple Inc. (AAPL): Capital Gains Today, Dividend Growth Tomorrow

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Celgene Corporation (NASDAQ:CELG) is slowly building up its cash reserves (just over $4 billion currently). It has done some buying back of shares, but has yet to pay a dividend. Celgene is still building up its product arsenal with an aggressive pipeline. This pipeline will drive continued growth for the company. Celgene is getting its feet wet with regenerative medicine via an agreement with Tengion.

Some expected growth drivers include:

  • FDA approval of Revlimid for multiple patient stages and diagnoses
  • Progression with anti-inflammatory medications Apremilast and Pomalyst

With cancer perhaps the world’s most prevalent health threat, all of these drugs are potential home runs worth billions of dollars in possible revenue.

As this pipeline matures, the company’s cash reserve will build up enabling possible dividend payments. Companies can generate massive amounts of cash from a few home-run products. Bristol Myers Squibb Co. (NYSE:BMY) and Eli Lilly & Co. (NYSE:LLY) sell the number-one and number-three drugs in the world, respectively. Bristol-Myers’ dividend is currently yielding 3.2%, and Eli Lilly’s dividend is currently yielding 3.6%. Coincidence? I think not.

The bottom line

Companies expand and grow, before eventually maturing and (usually, but not always) rewarding shareholders. A lot of the dividend-growth favorites of today looked a lot like the companies highlighted in this article. Investors with a long-term time frame and eye towards future dividends can take a look at these companies as potential additions to their portfolio.

Justin Pope has no position in any stocks mentioned. The Motley Fool recommends Apple, Celgene, and Visa. The Motley Fool owns shares of Apple.

The article Capital Gains Today, Dividend Growth Tomorrow originally appeared on

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