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Teva Pharmaceuticals A Giant In Generic Drugs

By: Investor's Business Daily
Posted: 2/6/2014 5:29:00 PM
Referenced Stocks: TEVA

Teva Pharmaceuticals ( TEVA ), based in Israel, is a monster in the world of generic drugs.

It manufactured more than 73 billion tablets and capsules in 2012 in 73 facilities around the world. One of out every six generic prescriptions in the U.S. is filled with Teva products, more than 1.5 million. In the European Union, more than 2.7 million prescriptions are written each day. It had 1,103 general approvals in Europe at the end of 2012.

It has 46,000 employees in 60 countries.

The Medical-Generic Drugs industry group has been strong the past few years. It ranked No. 9 out of 197 groups in Thursday's IBD.

That's up from No. 21 just six weeks ago.

Despite its size, Teva was a growth stock for much of the last decade, although it hasn't made a new high since March 2010. And the pace of earnings growth has been more erratic in recent years.

The five-year annualized growth rate is 14% and most of that growth occurred in the early part of that period. EPS for 2013 was $5.01 compared to $5.35 the previous year. Analysts are expecting an 8% decline in 2014 and flat earnings in 2015.

It has an Earnings Stability Factor of 9 on a 0 to 99 scale where low numbers correspond to stable earnings growth.

Teva has paid a dividend since at least 1988, when it paid out 4 cents a share. It didn't get above 10 cents until 2009. It most recently paid out 32.6 cents in November.

Its annual rate of $1.09 represents a yield of 2.4%. IBD calculates a healthy five-year dividend growth rate of 20%.

After three quarters of declining EPS and another quarter of flat earnings growth, earnings grew in the most recent quarter by 8% with 3% revenue growth.

Analysts are forecasting an 11% EPS increase in the next report. The ratio of long-term debt to shareholder equity is 51% and has been growing.