Dividend-Payer Amgen Is Hitting New Highs Again


Amgen ( AMGN ) took a break from hitting new highs in November, but it got back to it this week, aided in part by acquisition news.

The biotech giant's move to new high ground can be viewed as an attempt to break out from a flat base with a 90.05 buy point. Watch to see if the stock can close above that level amid strong turnover.

Beyond its generally promising chart action, Amgen has other positive qualities. It has three-year and five-year EPS Stability Factors of 3, not far from the calmest-possible grade of 0 on a scale that runs to 99.

That steadiness suggests the company should be able to keep paying its dividend, which provides an annualized yield of about 1.6%.

Thousand Oaks, Calif.-based Amgen also has an IBD industry group with a strong ranking. The biotech group ranked No. 33 out of 197 as of Thursday's IBD, although that's down a bit from where it's been in recent weeks.

Plus, Amgen has drawn increasing ownership by U.S. mutual and hedge funds over the past two quarters. That helps explain its No. 7 ranking in Tuesday's IBD Big Cap 20 screen.

Amgen's acquisition news was a deal to buy privately held Iceland-based gene researcher deCode Genetics for $415 million.

The stock rose 2% in above-average turnover on Monday after the deal was announced, then edged up Tuesday and Wednesday to new highs before pulling back Thursday in light volume.

Analysts at S&P wrote that they liked the deal.

The analysts said: "We view the proposed transaction favorably, and consistent with AMGN's focus on personalized treatments based on genetic markers, particularly for cancer. We think deCode's expertise in discovering genetic risk factors in human disease should enhance productivity across AMGN's drug pipeline."

S&P also has said that risks for Amgen include its "highly competitive and regulated markets," but that's "mitigated by AMGN's diversified product roster."

Amgen began paying a dividend last year. Another important recent change was the naming in May of a new CEO, Robert Bradway, who was previously the company's chief operating officer.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: AMGN

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