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Successful companies sometimes face events that can affect their stock performance. However, overcoming these obstacles is essential to achieving significant long-term profits. The key is to maintain dedication to known winners, even in difficult times.
CVS Health Corp (NYSE:CVS) and Gilead Sciences, Inc. (NASDAQ:GILD) are standing out from the recent general uptrend in the stock market. Despite facing several challenges, these healthcare giants are attractive options, especially for dividend-oriented investors.
CFS health
CVS Health has yet to meet expectations as its poor financial performance over the past 18 months has been primarily due to lower revenue from COVID-19 vaccine sales. During this period, the company has repeatedly lowered its projections.
For long-term investors, CVS Health has several strengths despite significant uncertainties. The large pool of potential patients gives it a competitive advantage over several biosimilar manufacturers in a highly competitive sector. Furthermore, there are still many development opportunities within the vast and growing healthcare sector.
Even if CVS Health faces difficulties, its robust ecosystem and well-known brand name will help the company bounce back. Moreover, the dividend program appeals to income investors.
Over the past decade, CVS Health has increased dividends by 142%, offering a forward yield of 4.64%, significantly beating the S&P 500 average of 1.35%. With a solid outlook, the company’s dividend is expected to remain safe for the foreseeable future, making it an attractive choice for income-oriented investors despite the market’s recent underperformance.
Under Lynch’s leadership, CVS has actively expanded into primary care. In May, it acquired Oak Street Health for $10.6 billion and in 2022 it closed a deal to acquire Signify Health for $8 billion.
Gilead Sciences
As an industry leader in cancer, virology and HIV, Gilead Sciences offers a broad range of medicines. Despite regulatory hurdles in recent years, Veklury, a COVID-19 antiviral drug made by GS, has maintained consistent income and revenue.
Gilead Sciences reported $6.1 billion in revenue in the first quarter – up 5% year over year. Sales of HIV drug Biktarvy’s reached $2.9 billion, up 10% year-on-year, underlining this strong performance. Biktarvy’s US market share increased to 49%, compared to 46% in the same quarter last year.
Gilead is also ramping up its efforts in oncology, with nearly a dozen programs in phase three trials and many more in earlier stages of development. With more than 50 programs in the pipeline, even a few approvals or label extensions per year can significantly increase the company’s revenue.
Gilead’s dividend program remains attractive, offering a forward yield of 4.58%. Over the past decade, the company has increased its payouts by 79%. Given its strong pipeline and market position, Gilead will likely continue to increase dividends through 2034.
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This article Buy Low, Hold Long: 2 Crushed Dividend Stocks to Buy for High Yields and Long-Term Gains originally appeared on Benzinga.com
