But not lately. As you can read in the article on page 8 of this issue, Amgen’s stock hit a new high last week – more than $85, up 50 percent from a year ago.
Why? Well, one analyst quoted in the article pointed to the new leadership, higher profits and good prospects for future drugs.
What’s more, Amgen last year started paying a nice dividend – becoming the first biotech to do so. But the analyst didn’t think that had much to do with the runup.
“Putting in a dividend is not going to boost your stocks 50 percent,” he said. “If that was all it took, everyone would do that.”
Well, a lot of companies have done that. As reported last week in Barron’s, the Standard & Poor’s 500 stock index was set to report an all-time high for dividend payouts in the month of August. Next year looks even better.
Dividends have become hot, and with good reason. Investors see low, low interest yields everywhere, so they’ve been seeking companies that offer dividends of 3 percent or more. Companies that have reasonable risk profiles, like Amgen, are prized. So lots of companies – even Apple – are now paying dividends.
No, I’m not suggesting Amgen’s dividend is solely responsible for its big jump. I am opining that it sure helped.
Charles Crumpley is editor of the Business Journal. He can be reached at email@example.com.