How Much Would You Need to Invest in These 5 Pharma Stocks to Earn $1,000 a Month in Dividends?
You'll need to generate $12,000 a year in dividends to average $1k per month from Amgen, Pfizer, J&J, AbbVie, and Bristol Myers Squibb.
Overview
Dividend investors often focus first on yield, which can lead to an overly aggressive portfolio. For example, in the pharmaceutical sector, Pfizer (NYSE: PFE) has a very attractive 6.1% yield, as of this writing. A roughly $200,000 investment in the stock would let you generate a bit over $12,000 per year in dividends, or, if you budget the quarterly payments well, $1,000 per month in income.
But there's a big risk in putting all of your eggs in one basket. Pfizer has a number of drugs facing patent expiration, and its research and development efforts haven't yet produced new drugs to replace the income they generate. Moreover, while its cash flow covers its dividend, earnings do not. Which is why you'd probably be better off investing roughly $70,000 each in Pfizer, Johnson & Johnson (NYSE: JNJ), AbbVie (NYSE: ABBV), Bristol Myers Squibb (NYSE: BMY), and Amgen (NASDAQ: AMGN). Here's a look at each one.
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Originally published at www.fool.com.