Pharmaceutical titanNovartis (
) announced job cuts in its research arm Thursday and the closure
of facilities in Europe and the U.S.
The moves, reported by Bloomberg, are part of a restructuring
in Novartis' research operations. About 500 workers are being
cut, while two facilities in Europe and one in La Jolla, Calif.,
will be shuttered. Also, the cancer research unit will move to
Cambridge, Mass., from Emeryville, Calif.
The Switzerland-based drug manufacturer has been reviewing its
operations since Joerg Reinhardt became chairman in August.
Novartis is targeting its animal-health business for a
divestiture, Bloomberg has reported.
The company has had a mediocre 2013, in which its annual
profit is expected to fall 1%. But analysts estimate a profit
increase of 6% in 2014 as the company resumes its steady history
Novartis' annualized profit growth rate over the past three
years is only 2%, but the three-year earnings stability factor is
outstanding at 3 on a scale of zero (most steady) to 99 (most
As a dividend stock, Novartis is a standout.
Based on U.S. dollars, the stock's annualized dividend yield
The dividend has gone up every year since 1996, according to
the company's website. In fact, its 60% dividend long-term growth
rate is the highest of all stocks in IBD's Dividend Leaders
Novartis makes treatments for cardiovascular, nervous system,
infectious and other diseases. It also has robust businesses in
eye care, generic drugs, vaccines, diagnostic tools and
Reflecting its steady financial performance, the stock tends
to trade quietly. The deepest correction in recent history was
the 46% decline during the 2008-09 bear market.
Novartis' U.S.-traded shares are near record highs. The stock
recently regained its 50-day moving average.