A Safe Biotech Dividend?

Investors can count on this dividend, UNLESS... ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

AN OXFORD CLUB PUBLICATION

View in browser Editor's Note: Good afternoon! In this week's Safety Net, Chief Income Strategist Marc Lichtenfeld evaluates a large cap biotech that one of our readers, Lucy, requested last week. Thanks for the suggestion, Lucy! I think you'll find that Marc makes a compelling case in today's Safety Net... but he's even more excited about a different biotech stock. This company has nearly quadrupled its quarterly dividend payout over the past decade, leading Marc to call it his "top dividend stock for a lifetime of income." Go here to find out how to get Marc's full report, titled "My #1 Dividend Stock"! - James Ogletree, Managing Editor SAFETY NET Amgen: The Rare Biotech With a Safe Dividend Marc Lichtenfeld, Chief Income Strategist, The Oxford Club When I first started covering the biotech sector 20 years ago, it was pretty difficult to find companies that paid dividends. Even today, there aren't many of them. When most investors hear "biotech stocks," they think of small, unprofitable companies that often don't even have revenue yet because they don't have any approved products. There are lots of biotech companies like that. They need to invest every dollar they have into developing their medicines, so they aren't able to pay a dividend. But there are also some mature biotech companies that are very profitable and cash flow positive and can afford to pay dividends. Amgen (Nasdaq: AMGN) is one of them. The company pays a $2.25 per share quarterly dividend, which comes out to a 3.3% yield. Biotech can be notoriously volatile, though, so can investors count on receiving the same dividend quarter after quarter? SPONSORED Monthly Passive Income (Only $25) Have you seen this strange monthly income investment? It's NOT a stock, bond or private company... It has NO age requirements... You do NOT need to be accredited to participate... And you can get in for as little as $25. Find Out What It Is Right Here Amgen's free cash flow slid from $8.8 billion to $7.4 billion last year. That is something Safety Net does not want to see. Declining free cash flow can be an early sign that a company might struggle to afford its dividend, and Amgen's one-year and three-year free cash flow growth are both negative. Fortunately, free cash flow is forecast to leap to $13.3 billion this year. Even if that prediction is way off, this year's free cash flow will still likely be higher than last year's (and probably 2022's as well). View larger image   Despite the down year in 2023, Amgen was still easily able to afford its dividend. It paid shareholders $4.6 billion for a 62% payout ratio. SPONSORED The Best AI Trade Rec of Alex Green's Career? Alex Green already booked wins on AI plays as high as 182% on Gitlab in 2.5 months... 275% on CyberArk in 3.5 months... and 386% on Crowdstrike in 2.5 months here in 2024. One of Alex's loyal followers said he made $62,700 in pure profit on Crowdstrike. But Alex says he has a new AI pick that could blow the returns of GTLB, CYBR and CRWD out of the water. How much could you make on it over the next three months? Access the details here from Alex before midnight tonight for maximum profit potential. In 2024, it's estimated that the total amount paid in dividends will rise to $4.9 billion. And thanks to the expected jump in free cash flow, the payout ratio should drop to just 37%. Amgen has also raised its dividend every year since it began paying one in 2011, so it has a strong track record of not only paying the dividend, but boosting it year after year. As long as free cash flow does in fact grow this year, dividend investors should have nothing to worry about. But if free cash flow doesn't increase in 2024, investors will need to start watching the stock more carefully. Dividend Safety Rating: B Good investing, Marc P.S. If you have a stock whose dividend safety you'd like us to analyze, leave the ticker symbol in the comments section below. You can also take a look to see whether we've written about your favorite stock recently. Just click on the word "Search" at the top right part of the Wealthy Retirement homepage, type in the company name and hit "Enter." Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds or closed-end funds. BUILD AND PROTECT YOUR WEALTH Get Marc's Top 5 Dividend Stocks (FREE PICKS) AI Discovers "A+ Trade Setups" Top Trader Reveals "One Ticker Payouts": One Ticker... One Trade... Every Week! The Blueprint for Financial Prosperity MORE FROM WEALTHY RETIREMENT The Economy Is Stronger Than You Think Our Best Tips for a Joy-Filled Retirement Will SoundHound Investors Get Burned Chasing AI Dreams? Is It Time to Worry About OneMain Holdings' 8% Yield? 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