Berkshire Shares: 1.51 million
YTD Returns: 2%
See a trend here? Buffett certainly likes health care!
There has been a lot of drug news lately that is inspiring for Big Pharma. Eli Lilly (NYSE:LLY) recently received a favorable report on a possible Alzheimer’s cure, and Merck (NYSE:MRK) proved its drug pipeline is paying off with a surge after strong results for its osteoporosis medication. This proves the old guard can and will survive even amid patent expirations.
Buffett holding and U.K. drugmaker GlaxoSmithKline (NYSE:GSK) made a splash of its own recently too — the buyout of Human Genome Sciences (NASDAQ:HGSI) for $3.6 billion. That could yield benefits in the long term with an addition to the product pipeline and the potential for blockbusters to replace older medications.
Of course, share prices have lagged year-to-date because that much-anticipated blockbuster hasn’t shown up yet. But there’s the big yield to consider in GSK while you wait.
However, note that GSK isn’t as consistent as domestic pharmaceuticals when it comes to distributions — the past four quarterly payouts range between 52 cents and 82 cents a share. But add up the past four consecutive payments, and you get about $2.43 annually for a hefty 5.2% yield.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.