The global pharmaceutical industry will generate more than $1.2 trillion in sales in 2025, according to Statista. A large portion of that figure is from the oncology segment, which is expected to generate $208 billion in sales next year. Longer-term sales projections show the industry should grow 4.7% annually, reaching $1.45 trillion by 2029.
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Not only are pharmaceutical stocks excellent defensive investments in an uncertain economy, but some pharma stocks also pay sizable dividends that can be a source of steady income and help offset the impact of inflation. Here are seven pharmaceutical stocks to buy with dividends of at least 2%, according to Argus:
| Stock | Implied upside over Oct. 14 close | Forward dividend yield |
| Johnson & Johnson (ticker: JNJ) | 11.4% | 3.1% |
| Merck & Co. Inc. (MRK) | 27.6% | 2.8% |
| Amgen Inc. (AMGN) | 10.9% | 2.8% |
| Sanofi (SNY) | 9.2% | 3.7% |
| Gilead Sciences Inc. (GILD) | -0.1% | 3.6% |
| GSK PLC (GSK) | 15.0% | 3.9% |
| Perrigo Co. PLC (PRGO) | 90.2% | 4.6% |
Johnson & Johnson (JNJ)
Johnson & Johnson is a global leader in the pharmaceutical, medical device and consumer health care products industries. Its key products include anti-inflammation drug Stelara, multiple myeloma and light chain amyloidosis drug Darzalex and pain relief drug Tylenol. Analyst David Toung says Johnson & Johnson’s dividend policy is one of several positives long-term investors should like about the stock. Toung says the company has an impressive pipeline of drug candidates in development, and Johnson & Johnson has opportunities to grow via both internal research and external acquisitions. Argus has a “buy” rating and $180 price target for JNJ stock, which closed at $161.60 on Oct. 14.
Dividend yield: 3.1%
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies. Merck reported 7% revenue growth in the second quarter, including 16% sales growth from leading cancer drug Keytruda. Sales for Merck’s HPV vaccine Gardasil were also up 1%. Analyst Jasper Hellweg says Merck is consistently gaining regulatory approvals for new drugs and additional indications and combinations for Keytruda and other major revenue-generating products. Hellweg says Merck’s acquisition of ophthalmology-focused biotechnology company Eyebiotech will also create value, such as potential treatments for diabetic macular edema and neovascular age-related macular degeneration. Argus has a “buy” rating and $140 price target for MRK stock, which closed at $109.69 on Oct. 14.
Dividend yield: 2.8%
Amgen Inc. (AMGN)
Amgen is one of the world’s largest biotechnology companies. Its leading commercial drugs include osteoporosis and hypercalcemia drug Prolia, autoimmune disease drug Enbrel, and osteoporosis, hypercalcemia and bone cancer drug Xgeva. Hellweg says Amgen has had several positive developments in 2024, including Food and Drug Administration approvals of Blincyto for treating a certain form of acute lymphoblastic leukemia and Imdelltra for treating extensive-stage small-cell lung cancer. Looking ahead, Hellweg says biosimilars, new drug launches and product acquisitions will be key growth drivers for Amgen to supplement its impressive cash flow. Argus has a “buy” rating and $360 price target for AMGN stock, which closed at $324.62 on Oct. 14.
Dividend yield: 2.8%
Sanofi (SNY)
Sanofi is a French pharmaceutical company that specializes in atopic allergic disorders, oncology and rare diseases. Its leading drugs include Lantus for treating diabetes and Dupixent for treating atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyps. Sanofi also acquired Provention Bio in 2023, which added Tzield to Sanofi’s existing diabetes treatment portfolio. Hellweg says Sanofi has an impressive, diversified business that includes branded pharmaceuticals, vaccines, generic drugs and consumer health care products. Its late-stage pipeline is particularly robust, including 33 product candidates in late-stage clinical trials or beyond. Argus has a “buy” rating and $60 price target for SNY stock, which closed at $54.92 on Oct. 14.
Dividend yield: 3.7%
[SEE: 7 Dividend Stocks to Buy and Hold Forever]
Gilead Sciences Inc. (GILD)
Gilead Sciences is a biopharmaceutical company that develops treatments for HIV/AIDS, hepatitis C, liver disease, hematology/oncology and inflammation. Its leading drugs include HIV drugs Biktarvy and Genvoya, and antiviral medication Veklury. Hellweg says Gilead is a market leader in HIV and oncology. He is bullish on the recent progress of the company’s portfolio, including the FDA granting accelerated approval for Livdelzi in combination with ursodeoxycholic acid for the treatment of primary biliary cholangitis (PBC). Hellweg says Gilead’s lenacapavir could also potentially provide 100% protection against HIV. Argus has a “buy” rating and $85 price target for GILD stock, which closed at $85.05 on Oct. 14.
Dividend yield: 3.6%
GSK PLC (GSK)
GSK is one of the world’s largest pharma companies. Leading products include Advair for asthma, Ventolin for bronchospasm and Theraflu for cold and flu symptoms. The company’s specialty medicine segment accounted for about 38% of total revenue in the second quarter and includes HIV, immune-inflammation, oncology and pandemic products. Earlier this year, the FDA approved GSK’s Jemperli in combination with chemotherapy, followed by Jemperli as a single agent in treating primary advanced or recurrent endometrial cancer. Hellweg says GSK is trading at a valuation discount relative to peers. Argus has a “buy” rating and $45 price target for GSK stock, which closed at $39.13 on Oct. 14.
Dividend yield: 3.9%
Perrigo Co. PLC (PRGO)
Perrigo provides self-care products and over-the-counter health and wellness solutions. In 2023, the FDA approved Perrigo’s Opill as the first-ever over-the-counter daily oral contraceptive pill available in the U.S. Analyst Kristina Ruggeri says Perrigo was a long-time industry leader in over-the-counter generics, which suffered from headwinds such as fewer FDA approvals and price erosion. Ruggeri says Perrigo’s decision to divest its generic pharma business and focus on self-care products such as Opill and emergency “day after” contraceptive pill ellaOne is a positive shift for investors. Argus has a “buy” rating and $46 price target for PRGO stock, which closed at $24.18 on Oct. 14.
Dividend yield: 4.6%
[READ: 5 Ways to Build Passive Income Through Investing]
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7 Best Pharmaceutical Stocks to Buy for Income originally appeared on usnews.com
Update 10/15/24: This story was previously published at an earlier date and has been updated with new information.
