Go to the Globe and Mail homepage

Jump to main navigationJump to main content

AdChoices

Bristol-Myers standing out in the crowd Add to ...

Subscribers Only

Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities. Click here to read more international insights.

The big U.S. drug companies look eerily alike. Pfizer, Merck, Eli Lilly and AbbVie (formerly Abbott) are all expanding revenues between very little and not at all, a pattern that is expected to persist. They have clean balance sheets. Dividend yields are 3 per cent to 3.5 per cent, and dividend payouts amount to 40 per cent or 50 per cent of net profits. The valuations, varying from just over 13 times forward earnings (Merck) and just under 15 times (AbbVie), are the highest in several years – though it should be kept in mind that earnings multiples are hitting multi-year highs across plenty of other sectors.

Report Typo/Error
 

More Related to this Story

Topics

Next story

loading

In the know

The Globe Recommends

loading

Most popular videos »

Highlights

More from The Globe and Mail

Most popular