The healthcare industry
The healthcare industry has an average dividend yield of 1.9%. Of the sectors within the industry, only pharmaceuticals, which has the highest dividend yield within the sector, has beaten the broad-based indexes’ dividend yields.
Industries within this sector and the top dividend payer under the respective industry are as follows:
- pharmaceuticals with a dividend yield of 3% and Novo Nordisk (NVO)
- medical equipment with a dividend yield of 1% and Medtronic (MDT)
- managed healthcare with a dividend yield of 1% and UnitedHealth Group (UNH)
- healthcare facilities and services with a dividend yield of 0.7% and Fresenius Medical Care (FMS)
- biotechnology & medical research with a dividend yield of 0.5% and Gilead Sciences (GILD)
- advanced medical equipment and technology with a dividend yield of 0.4% and Koninklijke Philips (PHG)
Pharmaceuticals generated negative six-month returns.
Companies are focusing on technology-driven services for cost and other efficiencies. They are utilizing the digital medium to make the customer experience better and more affordable. The aging demographics and rising health insurance costs continue to be a valuable driver of the sector.
The WisdomTree Emerging Markets SmallCap Dividend Fund (DGS) offers a dividend yield of 2.8% at a PE of 13x. It has 18% and 4% exposure to technology and healthcare, respectively. The First Trust Value Line Dividend Index (FVD) offers a dividend yield of 2.1% at a PE of 20.4x. It has a 21% and 6% exposure to utilities and healthcare, respectively.
We’ll discuss the dividend yields of the industrials, consumer cyclical, and technology industries in the upcoming parts of the series.