Investors Are Turning To Healthcare Stocks for Higher Yields
It’s no secret that interest rates continue to remain very low. The rate on the 10-year bond has fallen back below 3 percent. Savings accounts and CD’s hardly seem worth the trouble. That has caused investors to take a second look at high yielding dividend stocks.
Higher dividend yields have helped healthcare stocks to look much more attractive to investors. Just a few months ago most were trading near their 52-week lows as investors worried about their expiring patents. Now all they notice are their strong cash flows and high dividend payouts.
Here are 3 healthcare stocks that have benefited this year from investors looking for higher dividend yields.
Pfizer has been one of the pleasant surprises in the Dow index this year. Already the stock is up over 15 percent in 2011. That’s more than the stock has returned since 2003.
Even with this year’s big run, Pfizer is still the fourth highest yielding stock in the Dow Jones index with a current dividend yield of 4.0 percent. Last December, Pfizer raised their dividend by 11 percent and indicated that they will continue to increase their dividend over the next three years.
BMY stock is trading near their 52-week high thanks in no small part to their high dividend yield. The stock currently yields 4.6 percent after giving investors a small dividend increase last December. That has made the stock attractive enough to investors to send their stock up 7.5 percent since the beginning of 2011.
Abbott Labs has already seen their stock price go up over 8 percent this year. The dividend aristocrat has increased their dividend for 38 consecutive years and now offers a 3.7 percent dividend yield.
Not all high yielding healthcare stocks have participated in the dividend rally this year. Poor Merck is still in negative territory for the year. However, the defensive nature of healthcare stocks has made them more attractive in this unsettled market.