Every investor should have pharmaceutical and biotechnology
sector exposure given the gains they offer from both
global demographics and economic development. Israel's Teva
Pharmaceutical Industries (
) is one pharma stock that offers the opportunity to profit from
both growth and income modes of investing.
[caption id="attachment_56020" align="alignright" width="220"
caption="Teva: no problem getting higher"]
For the growth features, earnings-per-share have risen 36.75%
for Teva over the last five years. Quarterly sales growth is up
28.47%. The price-to-earnings ratio is slightly better than average
at 14.28, and projected to improve to 7.29 over the next year.
In terms of income, Teva has a fairly typical dividend yield of
2.13%. However, the average historical payout ratio for a stock is
around 50%, while Teva's is just 31.26%.
This is significant for several reasons. It shows there is cash
available to raise the dividend or implement a stock buyback
program. It also indicates company management that is fiscally
prudent and protective of the rights of individual
Teva is trading above its 20-day and 200-day moving averages,
but in a very narrow range. Recent
have been long, negative and engulfing, which is very bearish.
trends have also been negative. Relative volume has also been weak;
also bearish. These have been reflected in the share price of Teva
which is down for the last week, month, and quarter.
The professional analyst and investor community is
positioned to buy. TEVA has a minuscule short float, and the
company receives a very strong mean analyst rating of 1.90. Now
trading around $44 a share, the mean analyst price target for Teva
over the next year is $53.90.
Teva is the world's largest generic drug manufacturer, and is
likely to gain as the global population gets older and spends more
money on health care. Its current sagging price should be
viewed as a opportunity to accumulate shares at a