The stock market rally ran into the harsh reality last Friday that any interest rate pivot by the Federal Reserve may not come until 2024. As summer comes to a close with the Labor Day holiday next Monday, the bear market rally that started in June also has ended. The always bullish Wall Street crowd will try to talk up the market damage as a buying opportunity, but it is clearly a time to move to safer dividend stocks. One sector perfectly fits the bill now.
The health care sector offers great companies with demand for their products that does not change much due to inflation or recession fears. While those seeking over-the-counter products can shift to lower-priced brands, prescription drugs with no or limited generics are somewhat shielded.
We screened our 24/7 Wall St. health care research database and found eight top stocks that are Buy rated on Wall Street and pay safe, and in some cases big, dividends. These stocks make sense for worried investors now.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
AbbVie
This is a top pharmaceutical stock pick across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.
One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of 2020.
The bad news for shareholders is that AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.
Shareholders receive a 4.14% dividend. Wells Fargo has a Wall Street high target price of $200 on AbbVie stock. The consensus target is $159.24, and shares closed trading on Monday at $135.71.
Amgen
This biotech giant remains a safer way to play the massive potential growth in biosimilars. Amgen Inc. (NASDAQ: AMGN) discovers, develops, manufactures and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology and neuroscience.
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