Daily Stock Pick: Sanofi

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 large-cap drug manufacturer - a major company named Sanofi SA. Its trading ticker symbol is SNY.

Sanofi develops and markets drugs with a concentration in oncology, immunology, cardiovascular disease, diabetes, and vaccines.

The company offers a diverse array of drugs with its highest revenue generator, Lantus, representing just under 10% of total sales. About 30% of total revenue comes from the United States and 25% from Europe. Emerging markets represent the majority of the remainder of sales.

Sanofi was formerly known as Sanofi-Aventis and changed its name to Sanofi in May 2011.

Sanofi was founded in 1973 and is headquartered in Paris, France.

I use three key data points to gauge the value of any dividend equity-like Sanofi SA:

(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.

SNY Price

Sanofi's price per share closed at $41.33 yesterday. A year ago its price was $38.28. Price rose $3.05 or nearly 8% in the past year.

Assuming Sanofi's stock trades in the range of $38.00 to $50.00 this year, West's recent $41.33 price could rise by $4.67 and go to $46.00 by late-May, 2020.

SNY Dividends

Sanofi's most recent paid annual dividend was $1.74 declared April 25th and paid, May 31st.

That $1.74 Annual produces a yield of 4.21% based on yesterday's $41.33 closing price.

Gains For SNY?

Adding the $1.74 annual estimated dividend to my $4.67 estimate of

Sanofi's price upside shows a $6.41 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little under $1,000.00 today at the $41.33 recent stock price would buy us 24 Sanofi SA shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.42 per share.

Subtract that $0.42 brokerage cost from the estimated $6.41 gross annual gain leaves a net gain of $5.99 X 24 shares = $143.76 or a 14.4% net gain on a $991.92 investment.

Therefore, Sanofi SA whose trading ticker symbol is SNY, now shows a possible net gain of 14.4% including a 4.21% dividend yield.

Five brokers track Sanofi SA stock:

Three say "buy" SNY.

One says SNY will "outperform" peers.

One says "hold" SNY.

The consensus score is 1.6 or "outperform".

Therefore, you can look at Sanofi SA and see it has made money, is making money, and could net a 14.4% gain including a 4.21% 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 Sanofi SA is worth your time and money.

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