OK it has now been one year since my original post on my love of AMGN and actually in the last month there was an opportunity to purchase it near the price I paid - 130.09 was the print low for the stock. Just announced earnings today and they are doing much better than my original projections when I had stock value @ 2.29 and just announced raising dividend 27 percent to $4.00 per year quite a bit higher than I had in my original plan. Stock is caught in the Biotech overvaluation fight, but AMGN is not overvalued in my opinion.
So a year ago it was paying $2.44 in annual dividends and now dividend is up to $4.00 as their earnings are exploding upwards. AMGN expecting 10.75 for a PE of 15.5 you are getting great growth and income at a very cheap price. AMGN's main risk would be that bio-similar took away all their market. At this point the upside with new drug approvals is far more enticing to me than the risk of bio-similar.
As a point of comparison, just to drive indexers a bit batty, VTI which paid a quarterly dividend of .56 a year ago (vs AMGN .61) is now paying .51 (vs AMGN $1.00). While VTI is up 5.9% in the past year AMGN is up 10.46%.
The companies similar to AMGN that I own right now are IDA, WEC, KO, MO, MMM, HRL, CVS, CHD, ICE, ROP, VFC. all have increased dividend more than twice rate of inflation in last year and all have done well for me. There has been a hidden bull market in quality dividend risers for the past year as ZIRP continues to effect market. This bull market could end with an increase by FED in December but I believe all of them will continue to grow dividend faster than inflation.
I Also own GEO, HCP and MMP (relatively recent purchase after getting out of all oils about when I posted about AMGN as I thought oil would result in bear market of oil and related stocks - see oil stock thread.) as higher than average dividend stocks with good prospects for rating dividend at least as much as inflation and having shown a commitment to shareholders for dividends. But these stocks are not the same type of dividend stock as my other holdings.
RE: added interesting note from son of an old friend
I worked with a guy who was an early convert to indexing and in Jan 1995 when I was trying to get him to invest in individual stocks he asked me to give him one stock that could be held for the long term and beat S&P500 index, I told he should take 75% of his money and buy 30 year treasuries which at the time were yielding just under 8 percent and put 25% of his money in Brown Forman, because people were always going to drink and break dishes at restaurants. We bet 10 bucks on Brown Forman at 25% being better than the S&P 500 @ 25% of his portfolio writing up a letter, stating all this that his son found, in settling his affairs after his recent death in his financial information, unknown to me he bought 100 shares of Brown Forman in Jan 1995 for $5,500 and never sold, it was his sole holding in a brokerage account and that $5,500 is worth 40K todays after splits he now owns 375 shares, S&P 500 would be worth 23K with same investment, I never got my 10 bucks!