Dividend-paying firms can help you obtain passive income and market-beating returns. With the market dip, dividend stocks look attractively priced. Income investors have many possibilities.
Let's consider two of them: Biotech giant Gilead Sciences and generic drug specialist Viatris. Here's why both healthcare companies are worth purchasing for dividend-seeking investors.
Gilead Sciences' last two years were tough. The company failed to gain regulatory approval for two promising medicines, and HIV revenue growth has been hampered by lost patent exclusivity.
Gilead Sciences is a top coronavirus drugmaker. Veklury was one of the first antivirals FDA-approved to treat COVID-19.
Despite regulatory challenges, investors can anticipate Gilead Sciences to gain clearances soon. That will boost revenue and earnings growth. Gilead Sciences has a 4.8% dividend yield and a 36% cash payout ratio.
Since going public in November 2020, Viatris has underperformed the market. This mediocre performance may have valid causes. Mylan and Pfizer's off-patent medical unit, Upjohn, united to become Viatris.
Viatris looks to have Upjohn's difficulties. Unimpressive and sometimes nonexistent sales growth. Viatris' P/E is 2.8. Even with its challenges, the company looks too good at current levels, considering recent developments.
Biocon Biologics buys Viatris' biosimilar portfolio for $3.3 billion. The price is significantly higher than Viatris' expected 2022 adjusted EBITDA.
The corporation will invest the transaction proceeds in the second part of the year. Viatris expects new product releases to generate $600 million in 2022.
The drugmaker plans dividend increases and share buybacks. Viatris' 4.93% yield and 19.6% cash payout ratio leave space for dividend rises.