Tag Archives: NASDAQ:GILD

What I’m Doing With My Gilead Sciences, Inc. Shares

Gilead Sciences, Inc. (NASDAQ:GILD) shares have declined 40% since July 2015. Some investors have sold the stock and moved on. I wondered if I should do the same. I’ve decided to hold on for now. Here’s why.

Is Gilead Sciences priced at a value?

The company experienced tremendous earnings growth in 2014 and 2015, but itsĀ falling earnings since 2016 are expected to continue their slide for at least two more years.

Think of it this way, though, if the 2018 earnings-per-share forecast of $7.75 materializes, that will still be a CAGR of 30.6% over five years from 2013 to 2018, which will still be an amazing rate of growth that’s not easily found in such a big company.

Using that same $7.75 EPS, Gilead would be trading at a 2018 multiple of about 8.9, which would still be an attractive buy for a company that maintains its profitability. And if Gilead starts showing any hint of growth, the stock will surely start heading higher.

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Top 10 Health Care Stocks: Which To Buy? Part 3

Year to date, the SPDR S&P 500 Trust ETF (NYSEARCA:SPY) has outperformed Health Care ETF (NYSEARCA:XLV). The SPY has risen 6.6%, while the XLV has appreciated 4.1%. However, over the 5-year and 10-year periods, the XLV has outperformed the SPY. So, now that the Health Care sector as a whole underperforms the market in the short term, it may be time to consider investing new money in the sector.

Out of the three major drug manufacturers, Johnson & Johnson (NYSE:JNJ) is the highest quality and provides the steadiest growth and returns. However, it’s also the most expensive. To get a better value, consider Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) which trade at lower multiples with higher dividend yields to start.

To get more value and to maintain high quality, consider Amgen Inc (NASDAQ:AMGN) which trades at a reasonable multiple with an estimated growth of north of 7% per year and pays a safe and growing dividend.

UnitedHealth Group Inc (NYSE:UNH), Allergan plc (NYSE:AGN), and AbbVie Inc (NYSE:ABBV) are expected to deliver above average growth rates of more than 13% and they’re priced at reasonable valuations. However, investors should note AbbVie’s above-average debt levels and Allergan’s below average credit rating of BBB-.

Bristol-Myers Squibb Co (NYSE:BMY) and Gilead Sciences Inc (NASDAQ:GILD) are opposites. The former trades at more than 30x earnings with a growth rate of 20%. The latter trades at 7x earnings with a growth rate of 3%. Bristol-Myers is a growth play and Gilead Sciences is a value play.

The above is an excerpt from my Seeking Alpha article. So, to learn more about earnings estimates and dividend information of each company, check out the article here: Top 10 Health Care Stocks: Which To Buy? Part 3

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Disclosure: At the time of writing, I own shares in AMGN, ABBV, and GILD.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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5 US Stocks for High Dividend Growth

Summary

  • Some investors maybe worried about interest rate hikes.
  • Lower-yielding companies with estimated high earnings growth will likely be less affected by interest rate hikes compared to high-yielders.
  • These 5 companies could help complement the blue chip dividend payers in a dividend growth portfolio.

With the interest rate hike matter looming, investors might opt to look for investments which pay a lower yield, but have higher expected earnings growth rates.

If you’re looking for total return in investments and are not concerned about the immediate dividend income, here are 5 businesses for consideration. They are all expected to grow earnings at a rate of 10% or higher per year in the near future.

I placed them from lowest expected earnings growth to highest, assuming it’s easier to achieve lower growth than higher. So the companies appearing first are more likely to achieve their expected earnings growth. Additionally, they’re all expected to grow dividends at least 10% per year in the foreseeable future.

  1. Enbridge Inc (TSX:ENB)(NYSE:ENB) with 3% yield and 10-12% expected earnings growth.
  2. Gilead Sciences, Inc. (NASDAQ:GILD) with 1.5% yield and 11% estimated earnings growth.
  3. Union Pacific Corporation (NYSE:UNP) with 2.1% yield and 11% estimated earnings growth.
  4. Johnson Controls Inc (NYSE:JCI) with 2% yield and 12% expected earnings growth.
  5. Cummins Inc. (NYSE:CMI) with 2.2% yield and 15% estimated earnings growth.

To learn more about each of these companies, check out the Seeking Alpha article at 5 Dividend Companies With 10-15% Growth.

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