Amgen is among the best biotech stocks to buy in 2020. It is the largest independent biotech company and has a strong track record in cancer and kidney drugs. It is well-known for its immunology drugs as well. Recently, Moody’s has rated its new senior unsecured notes a Baa1 rating. This rating was assigned due to Amgen’s strong margins and consistent cash flows. Amgen also has several products in its early and mid-stage pipeline that hold plenty of long term growth potential.
Amgen reported its Q22020 earnings in July-end. Revenues were up 6% year-on-year to $6.21 billion while non-GAAP net income rose by 4% to $4.25 per share. Analysts had estimated revenues of $6.18 billion and a net income of $3.84 per share. The positive result happened in spite of the fact that sales were affected by the pandemic. Most healthcare facilities concentrated their resources towards COVID treatment and Amgen could not conduct in-person sales meetings to push through deals. The decline in sales was offset by strong performances of newer treatments, like the Otezla drug, that was purchased from Celgene last year.
Amgen’s guidance for the full year 2020 now stands at revenues of $25 to $25.6 billion and earnings per share of $15.1 to $15.75. What makes Amgen one of the best biotech stocks to buy now is its shareholder-friendly policies. In spite of the pandemic, Amgen expects to continue with its share buyback program of around $3 billion. A few days prior to the Q22020 earnings call, the company also communicated that it will pay a quarterly dividend of $1.6 per share, which represents a 2.5% yield.
Amgen is considered to be one of the best biotech stocks to buy. It has risen by 54% over the last 5 years which represents a CAGR of 9%. Its 5-year dividend yield average has been north of 2.5%.