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