DRIP Investor

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Charles Carlson, CFA
Editor, DRIP Investor Newsletter

Where To Go For Health Care

5/12/08

I remember when I first started in this business more than a quarter century ago, one group that was regarded as a “sure thing” for gains was health care, especially pharmaceutical stocks.

Well, things have certainly changed over the years. Indeed, pharmaceutical stocks have had plenty of problems in recent years. Generic competition, the lack of blockbuster drugs, and health concerns with existing medications have all served to dampen pharma stocks.

Still, some pharma stocks represent good portfolio holdings. Johnson & Johnson (JNJ), for example, should continue to put up solid gains. The company’s diversified business portfolio has helped limit exposure to any one sector in decline. J&J offers a traditional dividend reinvestment plan whereby an investor must already be a shareholder — and have the shares registered in his or he name — in order to enroll in the plan.

Another health-care company related to the pharma sector is Novo-Nordisk (NVO). The company, based in Denmark, is the world leader in insulin for diabetes. Given the expected growth of diabetes worldwide, demand should remain strong for the company’s products. Novo-Nordisk represents a quality buy in the group. The company permits U.S. investors to make initial purchases directly. For information on the Novo-Nordisk direct-purchase plan call (800) 428-4237 or visit www.adr.com.