Shutterstock photo
Markets

George Soros adds French drug maker Sanofi-Aventis to portfolio (PFE, MRK, SNY)

Shutterstock photo

Shutterstock photo

While American pharmaceutical giants such as Pfizer Inc ( PFE , quote ) and Merck & Co. ( MRK , quote ) have little upside, uber-investor George Soros has added 201,400 shares of Paris pharma Sanofi-Aventis ( SNY , quote ) to his holdings -- a $7 million investment.

Like PFE and MRK, Sanofi-Aventis has healthy financials and a robust dividend.

While the average dividend for a stock on the Standard & Poor's 500 Index is under 2%, Sanofi-Aventis has a high dividend yield of 5.24%. The dividend is easily supported by the payout ratio.

Along with the high dividend, Sanofi-Aventis has a strong balance sheet and an income statement that can still support growth, hence the investment by George Soros. Other drug companies like MRK and PFE now function like utilities, appealing for only the dividend income.

The price-to-earnings ratio is now around 15, but is projected to drop to just 8.64 over the next fiscal year. On a quarter-by-quarter basis, both sales and earnings growth curves are positive. The gross margin is close to 70%.

The professional investor community is bullish on Sanofi-Aventis. Even in a down market for European stocks, the short float is minuscule at 0.05%.

The mean analyst rating for Sanofi-Aventis is 1.60, which is very positive -- roughly between a "buy" and a "strong buy."

Now trading around $34.80, the mean analyst price target over the next year for SNY is $43.72.

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


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

Other Topics

Stocks

Latest Markets Videos