July 21, 2024

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3 High-Yield S&P 500 Dividend Stocks Down More Than 25% to Buy Now and Hold for at Least a Decade

2 min read

The S&P 500 is up an incredible 25% over the past 12 months, but not every stock in the benchmark index has participated in the rally. A handful of terrific healthcare stocks have fallen more than 25% from the peaks they set less than a year ago.

Shares of Pfizer (NYSE: PFE), Bristol Myers Squibb (NYSE: BMY), and CVS Health (NYSE: CVS) are down, but their dividend programs are still going strong. Here’s why investors can rely on these high-yield stocks to keep raising their payouts for at least another decade.

1. Pfizer

Shares of Pfizer are down about 31% over the past 12 months. The pharmaceutical company’s development pipeline is producing new drugs, but the stock market can’t get over how quickly sales collapsed for Comirnaty and Paxlovid, a COVID vaccine and antiviral treatment, respectively.

Despite sinking sales, Pfizer has steadily raised its dividend payout every year since 2009. At recent prices, it offers a huge 6.1% yield, and investors can reasonably look forward to at least another decade of consecutive annual raises.

Combined first-quarter sales of Comirnaty and Paxlovid fell more than 60% year over year to $2.4 billion. Management is predicting further declines for these drugs, but the worst is over, and the dividend is well funded. It expects adjusted earnings per share to land in a range between $2.15 and $2.35, which is more than it needs to meet a dividend commitment currently set at an annualized $1.68 per share.

Pfizer reported first-quarter sales that rose 11% year over year if we exclude Comirnaty and Paxlovid. With nine new drugs approved by the Food and Drug Administration (FDA) in 2023 alone, investors can expect a return to growth that could last throughout the decade ahead.

2. Bristol Myers Squibb

Shares of Bristol Myers Squibb are down about 35% from a high point they reached last summer. At its beaten-down price, the big pharma stock offers a nice 5.7% yield.

The stock has been under pressure lately because management slashed its adjusted…

2024-06-15 17:57:00

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