Updated: November 1, 2015
Many investors are almost addicted to the dividends that drug stocks pay. It’s easy to see why: Pfizer (PFE), Johnson & Johnson (JNJ) and Merck & Co. (MRK) all pay a secure 3%, thanks to the profits they reap from their pills.
But today’s dividends are merely a product of today’s cash flow. If you’re interested in the best long-term returns tomorrow and beyond, you need to dig deeper. Which is why my second-level assessment of any drug company starts with its R&D pipeline.
Few can boast bigger homeruns in that area than Gilead Sciences, Inc. (GILD). In December 2013, the FDA greenlighted its Sovaldi hepatitis C treatment.… Read more