Top Performing Dividend Payers in Health Care with the Most Upside Potential (TRIB, STE, CMN)
It is not unusual for stocks on a tear to the overrun their mean price targets, which is a signal of how far analysts on average expect the share price to climb. Many of the top performing dividend payers in the health care sector over the past six months, such as Eli Lilly (NYSE: LLY) and PDL BioPharma (NASDAQ: PDLI), have done just that. Others are at or near their mean price targets.
This Little Falls, New Jersey-based provider of infection prevention and control products and services has a market capitalization of about $686 million and a dividend yield near 0.4 percent. The long-term earnings per share (EPS) growth forecast is about 18 percent and the PEG ratio is less than the industry average. The operating margin is greater than the industry average. Both of the analysts surveyed by Thomson/First Call who follow the stock recommend buying shares, one of them rating it at Strong Buy. The mean price target is almost 16 percent higher than the current share price, which has pulled back about eight percent in the past month, after posting smaller than expected revenue for the most recent quarter. Over the past six months, the stock has outperformed Baxter International (NYSE: BAX) and Coviden (NYSE: COV).
Steris also provides infection prevention and control products and services. It is headquartered in Mentor, Ohio, and has a market cap of about $2 million and a dividend yield of more than two percent. Its P/E ratio is lower than the industry average, and the long-term EPS growth forecast is more than 12 percent. The return on equity is almost 17 percent. Five of the eight analysts surveyed recommend buying shares; none recommend selling. Their mean price target is more than 12 percent higher than the current share price, as well as higher than the 52-week high. Steris is up about 19 percent year to date despite pulling back a bit in recent days. The stock has outperformed Ecolab (NYSE: ECL) and Johnson & Johnson (NYSE: JNJ), as well as the broader markets, over the past six months.
This Irish maker of diagnostic test kits and instrumentation sports a market cap of a little over $300 million and offers a dividend yield of about 1.1 percent. The P/E ratio is lower than the industry average. The long-term EPS growth forecast is about 16 percent. And the operating margin, a company record in the recently reported period, is greater than the industry average. All of the three analysts surveyed recommend buying shares; two of them rate it at Strong Buy. Their mean price target is more than 17 percent higher than the current share price, which is near the 52-week high. Shares are trading about 41 percent higher than at the beginning of the year. Over the past six months, the stock has outperformed Johnson & Johnson (NYSE: JNJ) and the broader market.
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