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Top Dividend Stocks in Healthcare

We like Pfizer, Roche, Allergan, and Medtronic in this space.

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Damien Conover: We are talking about dividends in the healthcare sector today. When we think about dividends within this sector, most of the companies that are going to be paying dividends are in the large-cap pharmaceutical or large-cap biotechnology space. Most of these dividends in their history have been very, very safe, and we think that's very likely to be the case going forward. These firms generate enormous amounts of cash flows and can really support strong dividend payouts.

A couple of names we want to highlight as far as stocks that we think are both undervalued and have strong dividends are, first within the pharmaceutical space, will be Pfizer. Pfizer is a name that has a nice growth potential, not a lot of patent losses, and is really set up well to pay out a continual stream of dividends. This is a firm that we think is undervalued and underappreciated with a very strong pipeline. That pipeline will really help the firm be able to generate that future cash flow that will be needed for the dividend.

Damien Conover does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.