The stock market’s recent volatility shouldn’t concern investors with a long-term outlook. In fact, it’s probably a blessing in disguise for the buy-and-hold crowd. Several great stocks, after all, are now trading at attractive valuations.
In the beaten-up healthcare sector, for instance…
AbbVie (NYSE:ABBV) and Amgen (NASDAQ:AMGN) stand out as two outstanding buys following their poor showing through the first nine months of 2019. Here’s why these top dividend-paying biotech stocks are worth adding to your portfolio right now.
AbbVie: Buy the fear
AbbVie’s shares are shrouded in fear right now. The singular reason is that the company’s main revenue source — the anti-inflammatory drug Humira — has firmly entered the back end of its rather remarkable run as one of the industry’s most profitable products.
Emphasizing this point, Humira’s sales appear to have crested at around $20 billion in 2018, with biosimilars taking a heavy toll in Europe this year. Some Wall Street analysts have even floated the idea that Humira’s sales might plummet by an eye-popping 85% from their former high-water mark by 2025. That’s obviously not a favorable trend line, but it’s also not the end of the world.
AbbVie has built out a solid portfolio of next-generation products and it recently inked a merger agreement with Allergan (NYSE:AGN) that will immediately soften the blow from Humira’s demise. Underscoring this point, AbbVie should have no fewer than six blockbuster products (Botox, Imbruvica, Orilissa, Rinvoq, Skyrizi, and Venclexta) by 2025, thanks to its top-notch clinical pipeline and tie-up with Allergan.
Apart from AbbVie’s impressive portfolio of newer growth products, there are two more compelling reasons to consider buying this elite biotech stock soon. First, AbbVie’s shares are dirt cheap right now at 7.56 times forward earnings. Second, this Dividend Aristocrat sports a substantial yield of 5.84% at current levels. Bargain-hunters, in kind, should probably take advantage of AbbVie’s yearlong downturn. This top drugmaker will eventually rebound after all.
Amgen: Better days are ahead
Amgen’s shares have fallen by nearly 3% so far this year. As a result, the stock is now trading at 12 times forward earnings, which is a lower-tier valuation for a blue chip biotech — especially one that sports a slightly above-average dividend yield of 3%. Still, the market appears more than content to simply sit on the sidelines when it comes to this top dividend stock, despite its attractive valuation and juicy dividend.
What’s keeping investors at bay? Amgen is going through a…
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