Biotechnology stock Amgen (AMGN) is another healthcare stock worth exploring to cash in on the Baby Boomers creating increased demand for specific products and treatments. Amgen focuses on cancer, kidney disease and arthritis, so it will have no shortage of sales in the coming years regardless of the demographic trends here.
But it’s not just the recession-proof appeal that makes Amgen crash-proof. Many folks think that tech stocks are always the big cash hoarders, but at the end of June, Amgen reported an amazing $22 billion in cash and short-term investments. That’s more than enough to fund research to keep its drug pipeline going, snap up smaller biotech firms and keep humming along.
There’s also hope for continued dividend increases. Though the yield in Amgen is just 1.8%, the payout of $1.88 annually is just 22% of fiscal 2014 earnings — not only sustainable, but ripe for a bump higher. Amgen boosted its payout 30% in 2013 over 2012’s rate, and investors can bank on that trend continuing going forward.
With stable positioning as a healthcare stock serving older Americans and with potential dividend upside, Amgen is a very safe bet. The fact that the stock is up 25% YTD in 2013 to outperform the S&P is the icing on the cake.