West Pharma Brokers Say Its Future Is Grim. I Disagree.

This week I'm seeking a prestigious and long-term dividend-paying stock from the healthcare business sector. 

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; health care plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

Today I'm reviewing a mid-cap medical instruments and supplies firm, named West Pharmaceutical Services, Inc. Its trading ticker symbol is WST

West Pharmaceutical Services Inc develops, manufactures and sells packaging components and systems for injectable drug delivery, including stoppers and seals for vials, closures and other components used in syringe, and prefillable syringe components.

The company operates through two segments, Proprietary Products and Contract-Manufactured Products. 

The Proprietary Products segment offers stoppers and seals for injectable packaging systems;administration systems that enhance the safe delivery of drugs. It also provides drug containment solutions, including CZ, a cyclic olefin polymer in the form of vials, syringes, and cartridges. This segment serves biologic, generic, and pharmaceutical drug companies. 

The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of components and devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. This segment serves pharmaceutical, diagnostic, and medical device companies. 

The company distributes its products through its sales force and distribution network, as well as contract sales agents and regional distributors. 

West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.

I use three key data points to gauge the value of any dividend equity or fund likeWest Pharmaceutical Services, Inc.(WST): 

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock an equity or fund in which to invest.

But those first three primary keys, best tell whether a company has made, is making, and will make money. 

WST Price

West's price per share was $115.62 at yesterday's market close.A year ago its price was $95.67 for a price gain of $19.95 per share for the year.  

Assuming West's price will trade in the range of $84 to $144 next year, West's recent $115.62 price could manage a $20.00 gain and grow to $135.62 by early-October, 2019. 

WST Dividends

West's most recent quarterly dividend was $0.15 declared September 24th and payable November 7th. 

At this most recent $0.15 quarterly rate, West's annual dividend equals $0.60 yielding 0.52% at yesterday's closing $115.62 price.

Gains For WST?

Adding the $0.60 estimated annual dividend to my estimated $20.00 annual price upside for West (WST) makes a $20.60potential gross annual per share gain, which will be reduced by the costs to trade the shares.  

 A little over $1,000.00 invested today at the $115.62 recent price buys 9 West Pharmaceutical Services, Inc.(WST) shares. 

A $10 broker fee paid half at purchase and half at sale costs $1.11 per share, subtracting that $1.11 brokerage cost from the estimated $20.60 gross annual gain leaves a net gain of $19.49 X 9 shares = $175.41 or a 17% net gain on a $1,040.58 investment.

Therefore, West Pharmaceutical Services, Inc., whose trading ticker symbol is WST, now shows a possible 17% net gain including a 0.52% dividend yield. 

Eight brokers cover this stock:

Two brokers say WST is a "buy".

One broker says WST will "outperform" its peers.

Two brokers say WST's a "hold".

But three brokers say WST will "underperform" its peers 

Thus, the consensus recommendation number available is 2.75, or 'hold'

The median price target set by the eight brokers is $8.00 under Wests' most recent closing price.

So, you could look at these few speculative numbers this way, West Pharmaceutical Services, Inc., whose trading ticker symbol is WST,has made money, is making money, and could net a -5% to 17% net annual gain including a 0.52% dividend yield. It could be more, it could be less. 

The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if West Pharmaceutical Services, Inc.(WST) is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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