{"id":20261,"date":"2023-06-08T23:44:58","date_gmt":"2023-06-09T03:44:58","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/amgen-stock-big-yield-and-dividend-growth-on-sale-now-nasdaqamgn\/"},"modified":"2023-06-08T23:45:01","modified_gmt":"2023-06-09T03:45:01","slug":"amgen-stock-big-yield-and-dividend-growth-on-sale-now-nasdaqamgn","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=20261","title":{"rendered":"Amgen Stock: Big Yield And Dividend Growth On Sale Now (NASDAQ:AMGN)"},"content":{"rendered":"
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Headline<\/strong><\/h2>\n

In my search for safe, sustainable, and sizable dividend yields, my hunt normally leads me to the dividend aristocrats. Good ideas within this spectrum are usually garnered by searching the Pro Shares S&P 500 Dividend Aristocrat ETF (NOBL) list. I chose not to buy the fund outright, as I like to allocate my aristocrat portfolio more like a Dow Dogs list, looking for good deals within the top 10-15 yields. For that reason, I really like the Schwab US Dividend Equity ETF (<\/span>SCHD). Sometimes good dividend growth ideas pop up that are not within that list because they have not yet met the 25-year standard of dividend growth.<\/span><\/p>\n

One of these stocks that has caught my eye is Amgen Inc. (NASDAQ:AMGN<\/span>). They are a DJIA 30 component and are within the Dogs of the Dow top 10 yields. Many of the Dogs have some questionable sustainability of the dividend. I am not seeing that with Amgen Inc. I own this stock because I self-index the DJIA 30 as a beta strategy. I have not purposely purchased this stock in larger-than-index matching sizes. The stock looks like a buy at this price and yield, let’s take a look.<\/span><\/p>\n

The chart<\/strong><\/h4>\n

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\"Chart\"
Data by YCharts<\/figcaption><\/figure>\n<\/p>\n

Down 24.51% from the all-time high, Amgen is in a bear market within the index. It has not been obliterated, but has taken a nice dip. I love to examine stocks that are at least 20% off their highs. Amgen Inc. fits the bill.<\/p>\n

What they do<\/h2>\n

From the 10-K:<\/p>\n

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Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a biotechnology company committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.<\/p>\n

Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people’s lives. A biotechnology pioneer, Amgen has grown to be one of the world’s leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.<\/p>\n<\/blockquote>\n

Clients and sales<\/h2>\n

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\"Amgen<\/span>
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Amgen 10K<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

As a product mix, Amgen Inc.’s Prolia osteoporosis treatment seems to have the most growth with the still current sales leader, Enbrel, declining. Amgen Inc. offers such a multitude of treatments that almost a quarter of the sales are allocated to the “other products” category. This is about as diverse a biotech\/pharma company as you can find.<\/p>\n

Territories<\/h4>\n

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\"Amgen<\/span>
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Amgen 10K<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

With 72% of sales coming from the U.S., this is a U.S. economy-centric story. With the winding down of Covid, almost all medical-related sector stocks are being pulled down as a whole. This is a great opportunity to find the best operators with the greatest margins.<\/p>\n

Valuation models<\/strong><\/h2>\n

Based on Gordon Growth Model<\/strong><\/h4>\n

This dividend discount model, created by MIT professor Myron J. Gordon, will find the price target for the stock by discounting the dividend by the required rate of return, RRR, minus the 5-year dividend growth rate. We’ll then reduce that price by another 15% as that was the minimum margin of safety indicated by Ben Graham and Warren Buffett. In this case, I want a required rate of return higher than the market, since this is not a dividend aristocrat and the dividend is not a proven bi-product of the investment.<\/p>\n