Potential Dividend Growth for 5 Large Pharmaceutical Companies: 2011 to 2015

The five large pharmaceutical companies that I follow are Bristol-Myers Squibb (BMY), Eli Lilly (LLY), Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE). Each is facing patent expirations that will limit sales, earnings and dividend growth over the 2011-15 period. Anticipation of this has compressed price earnings ratios and produced historically high dividend yields. Here are my projections for sales, EPS and DPS (dividends per share) for the 2011-15 period. The dividend yields which range from 3.4% to 5.2% have caught the attention of dividend-driven investors as they compare very favorably to the 3.0% yield of the 10-year treasury note. These yields are even more compelling if you share my view that interest rates are destined to rise so that there is the potential for a decline in principal for the 10-year that would reduce total return unless the notes are to be held to maturity. Because this interest... Read more