As an investor, it doesn't pay to follow the crowd.

In this series, though, we highlight a possible exception -- the collective wisdom of our CAPS community. Read the next section if you're unfamiliar with our methodology. Skip it if you want to go straight to the results.

Why this crowd is different
Jumping into a stock because your rich neighbor did, or because you heard about it from your friend's uncle who used to work on Wall Street, or because CNBC has been talking about it nonstop is a recipe for disaster.

If there's one thing I've learned as a stock analyst, it's that any stock can be gussied up to sound like a world-beater. If there's a second thing I've learned, it's that being a smart person doesn't make you a good investor.

In the hands of a smart person with good communication skills, the never-were and never-will-be stocks sound like tickets to instant fortune. The ancient Greek philosophers made the distinction between rhetoric and knowledge. The former is convincing; the latter is true.

That's why we factor in track record in our Motley Fool CAPS community. We invite everyone to give stocks an outperform (akin to a "buy" call) or underperform rating (akin to a "sell" call) in CAPS. We then use those opinions to calculate a rating for each stock -- from one to five stars (five being the best). But -- and this is a big distinction -- we give more weight to the opinions of folks whose picks have performed well in the past.

The top 7 pharma high yielders
With that methodology as prelude, I present to you the seven four- and five-star-rated pharmaceutical stocks that yield 3% or more and have garnered the most outperform ratings by CAPS members. I used a minimum market capitalization of $100 million and the proviso that it must be listed on a major U.S. exchange. Remember, stocks are rated on a five-star scale by our CAPS community, so four- and five-star stocks are consensus outperforms.

Company Name

 Market Capitalization (in millions)

P/E Ratio

Dividend Yield

CAPS Rating (out of 5)

Outperform Picks

Johnson & Johnson (NYSE: JNJ)

$157,058

11.8

3.8%

*****

   12,786

Pfizer (NYSE: PFE)

$127,889

15

4.5%

****

    5,450

Merck (NYSE: MRK)

$108,068

7.7

4.3%

****

    2,540

Abbott (NYSE: ABT)

$76,182

14.5

3.6%

*****

    1,886

Bristol-Myers Squibb (NYSE: BMY)

$44,571

14.7

4.9%

*****

    1,502

Novartis (NYSE: NVS)

$120,071

12.3

3.1%

*****

    1,453

GlaxoSmithKline (NYSE: GSK)

$97,070

15

4.9%

*****

    1,346

Source: Motley Fool CAPS.

This list reads like a who's-who of the big boys. This makes sense because of the lifecycle of a drug company. Only after a company has established a pipeline will it want to start returning cash to shareholders as dividends. Johnson & Johnson looks especially attractive today because of its (hopefully) near-term problems with recalls.

Indeed, more CAPS members think Johnson & Johnson is an outperform than any other high-yielding pharma stock. Which is your favorite? Make your thoughts known in CAPS by clicking here. Or just go there to do further research on one of these stocks.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Anand Chokkavelu owns shares of Pfizer. Pfizer is a Motley Fool Inside Value pick. GlaxoSmithKline and Novartis are Motley Fool Global Gains recommendations. Johnson & Johnson is a Motley Fool Income Investor pick. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of GlaxoSmithKline. The Motley Fool has a disclosure policy.