Buy Novartis: A Dividend Gem In The Pharmaceutical Industry

Novartis (NVS) is the most valuable healthcare brand in Europe and the third largest in the world. The company specializes in research, development and manufacturing of a wide array of healthcare products, with pharmaceuticals contributing the largest share. NVS has five segments: Pharmaceuticals for patent-protected prescription medicines; Alcon (surgical, ophthalmic pharmaceutical and vision care products); Sandoz for generic pharmaceuticals; Vaccines and Diagnostics; and Consumer for OTC and animal health.

The stock is currently trading at 11x its forward earnings; analysts estimate a mean price target of $65. We are particularly optimistic about NVS's strong portfolio of drugs and a rich pipeline. Also worth mentioning is the fact that Novartis is aware of the competition from generics once patent for its products expires and is ready to counter the threat through its Sandoz division focused on the development of generics.
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