This week, I'm looking for the fifth healthcare representative of six for my Ivy portfolio.
The healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries include: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.
Today I'm reviewing a mid-cap medical instruments and supplies company named West Pharmaceutical Services, Inc. Its trading ticker symbol is WST.
West Pharmaceutical Services is a Pennsylvania-based medical supplies company that operates as a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries.
West develops, manufactures, and distributes elastomer-based supplies for the containment and administration of injectable drugs, including basic equipment such as syringes, stoppers, and plungers, along with more complicated devices like auto-injectors and other self-injection platforms.
The company reports in two segments: proprietary products (76% of 2018 sales) and contract-manufactured products (24%). The firm generates 56% of its revenue from international markets and 44% from the United States.
The company distributes its products through its sales force and distribution network, as well as contract sales agents and regional distributors.
The company was founded in 1923 and is headquartered in Exton, Pennsylvania.
I use three key data points to gauge the value of any dividend equity-like West Pharmaceutical Services, Inc:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest.
Those first three primary keys, however, best tell whether a company has made, is making, and will make money.
WST Price
West's price per share closed at $116.29 Friday. A year ago its price was $91.53. Price rose $24.76 or over 27% in the past year.
Assuming West's stock trades in the range of $90.00 to $130.00 this year, WST's recent $116.29 price could rise by $1.71 and go to $118.00 by late-May, 2020.
WST Dividends
West's most recent declared quarterly dividend was $0.15 declared May 8th and payable, August 7th.
That $0.15 Quarterly dividend equates to an annual payout of $0.60 for a yield of 0.52% at yesterday's $116.29 closing price.
Gains For WST?
Adding a $0.60 annual estimated dividend to my $1.71 estimate of
West's price upside shows a $2.31 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little over $1,000.00 today at the $116.29 recent stock price would buy us 9 West Pharmaceutical Services, Inc shares.
A $10 broker fee paid half at purchase and half at sale will cost us $1.11 per share.
Subtract that $1.11 brokerage cost from the estimated $2.31 gross annual gain leaves a net gain of $1.20 X 9 shares = $10.80 or a 1.02% net gain on a $1,046.61 investment.
Therefore, West Pharmaceutical Services, Inc whose trading ticker symbol is WST, now shows a possible net gain of 1.02% including a 0.52% dividend yield.
West Pharmaceutical Services, Inc stock:
Three say "buy" WST.
One says WST will "outperform" peers.
Two say "hold" WST.
Two say WST will "underperform" peers.
The consensus score is 2.4 or "outperform".
Therefore, you can look at West Pharmaceutical Services, Inc and see it has made money, is making money, and could net a 1.02% gain including a 0.52% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to determine if West Pharmaceutical Services, Inc is worth your time and money.
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