Questcor Stock Delivers Big Growth And Income

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Questcor Pharmaceuticals ( QCOR ) is not your typical income stock. Its shares have been volatile, but the company has produced big growth and a large dividend yield.

The Anaheim, Calif.-based firm is best known for its Acthar Gel, used to treat about 19 conditions including multiple sclerosis, infantile spasms and nephrotic syndrome. Acthar accounts for nearly all of the company's revenue, which can be risky. But Questcor is seeking new applications for Acthar.

Questcor's earnings and sales fell in 2009, but they've grown by double or triple digits since. Last year, profit surged 162% and sales bolted 133%. Both marked the best performance in years. Questcor has a three-year Earnings Stability Factor of 14, a good score that was hurt by the drop in 2009. Its three-year sales growth rate is a solid 93%.


Last week, the company reported Q1 earnings that rose 25% to 76 cents a share. Sales grew 41% to $135.1 million. Both marked a sharp slowdown from recent periods and missed expectations. Distribution-channel issues and lower prescriptions for MS flare-ups hurt revenue.

The company, however, said that shipments of Acthar in April and prescriptions signaled a comeback.

Questcor started paying a dividend in the third quarter of 2012. The firm currently pays 25 cents a share per quarter, or $1 a share annually, for an annualized yield of about 3%. Its yield is about at the middle among other dividend-paying stocks in IBD's Medical-Ethical Drugs industry group.

Last fall, Questcor got hit hard after Citron Research said health insurerAetna ( AET ) revised its opinion of Acthar. News of a government probe into its promotional practices didn't help shares either. But the stock has been recovering steadily.



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



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: AET , QCOR

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