Is There Hope for This Top Dividend?
2013 has been a tough ride for AstraZeneca investors. This big pharma stock has barely inched higher on the year -- shares have gained just around 4% year-to-date, far outperforming many of its pharmaceutical rivals. The big questions around AstraZeneca fall back to the patent cliff. The company has already seen sales hit hard this year due to patent losses, but the worst could be yet to come, as top sellers such as Nexium and Crestor lose patent protection in the U.S. and abroad in the coming few years.
For dividend investors, this perfect storm of falling sales and coming patent losses is making AstraZeneca's dividend's future look especially dicey. The company has long had one of the top dividends in the health care sector, and while AstraZeneca's dividend payout ratio is high, it's less than some of the company's rivals. However, AstraZeneca's coming patent losses has some questioning whether the company can afford to keep up that high dividend.
Should you put your faith in this dividend stock? In the video below, Fool contributor Dan Carroll tells you what's ahead for AstraZeneca in the near future -- and what it means for dividend investors concerned about AstraZeneca's yield.
AstraZeneca and other big pharma giants have long been havens for income investors looking for high-yielding picks. However, the patent cliff's impact on the industry's sales recently show the critical importance of diversifying your portfolio -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by clicking here.
The article Is There Hope for This Top Dividend? originally appeared on Fool.com.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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