Pharmaceutical Stocks Without Vaccines, At Least Dividends...

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Junho] As the long-term adjustment of pharmaceutical and bio stocks continues, there are calls for a strategy focusing on dividends rather than stock price gains.

Sangsangin Securities on the 26th pointed out Kyungdong Pharmaceutical and Samjin Pharmaceutical as relatively high-dividend stocks within the pharmaceutical sector. Kyungdong Pharmaceutical paid a dividend of 500 KRW last year and also paid an interim dividend of 100 KRW in the first half of this year. Based on last year's dividend scale, an additional 400 KRW can be expected by the end of the year, which results in a dividend yield of 3.8% based on the stock price. Samjin Pharmaceutical has been paying an annual dividend of 800 KRW. If this standard is maintained, this year's dividend yield will be 3.1%. Hana Pharmaceutical is estimated at about 1.8%.

Sangsangin Securities viewed such dividends as a ray of hope for pharmaceutical stock investors. Currently, the operating performance of pharmaceutical companies is stagnant due to COVID-19. Bio stocks lack momentum as there are few successful cases such as proper new drug development. From the stock market supply and demand perspective, buying interest has shifted to secondary batteries, hydrogen fuel cells, etc., resulting in minimal interest in bio stocks.

Researcher Ha Taegi of Sangsangin Securities said, "Except for the COVID-19 vaccine CMO-related business, which has seen a significant stock price increase recently, it is difficult to expect major changes until the end of the year," adding, "One of the issues to consider for the remaining short time until year-end is dividends."