Will Amgen Help You Retire Rich?http://www.fool.com/retirement/general/2012/06/08/will-amgen-help-you-retire-rich.aspx Dan Caplinger
June 8, 2012
Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won't just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.
When it comes to conservative stocks that retirees tend to prefer, biotech companies don't immediately jump to the front of your mind. But big biotech leader Amgen (Nasdaq: AMGN ) was one of the pioneers of the industry, and as a result, it actually has a relatively mature business with stable cash flow and even a healthy dividend yield. Still, competition is fierce in the industry, especially as traditional pharma stocks face big patent cliffs that have left them scrambling for new drug prospects. Can Amgen make the most of the situation? Below, we'll revisit how Amgen does on our 10-point scale.
The right stocks for retirees
Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.
When scrutinizing a stock, retirees should look for:
With those factors in mind, let's take a closer look at Amgen.
Source: S&P Capital IQ. NM = not meaningful; Amgen paid its first dividend in February 2012. Total score = number of passes.
Since we looked at Amgen last year, the company has picked up a point. The new dividend gave Amgen's score its boost, but investors are just as happy about gains of nearly 20% for the stock in the past year.
Amgen finds itself in a cutthroat environment right now. For instance, in psoriasis treatment, its brodalumab is going head-to-head against Eli Lilly's (NYSE: LLY ) ixekizumab, and Amgen's also going up against Regeneron Pharmaceuticals (Nasdaq: REGN ) with a potential cholesterol treatment.
One area where Amgen is fighting hard is in biosimilars, the biotech equivalent of generics. Teva Pharmaceutical (Nasdaq: