Sean WilliamsOpens a New Window. : Income seekers looking to add a company with solid growth prospects for both profits and future dividends should getBristol-Myers Squibb(NYSE: BMY)-- whose stock is currently trading at a 52-week low-- on their radar.
The drug giant was hammered in early August after the company surprisingly announced that its blockbuster cancer immunotherapy Opdivo failed to reachOpens a New Window. its primary endpoint of a statistically significant improvement in progression-free survival in the CheckMate-026 study. This trial was testing Opdivo as a monotherapy for patients with previously untreated advanced non-small cell lung cancer (NSCLC) whose tumors had PD-L1 expression of at least 5%. Some analysts have suggested that this surprising failure could cost Bristol-Myers $4 billion in peak annual sales for Opdivo.
However, I'd opine that this failure could be the perfect time to buy. Keep in mind that the CheckMate-026 study examined Opdivo as a monotherapy. Cancer immunotherapies, which work by blocking the immunosuppressant quality of cancer cells and supercharging the immune system, often work best when used as combination therapies with existing chemotherapies. I'd take this disappointing trial with a grain of salt.
Opdivo has the opportunity to remain a standard-of-care therapy in quite a few indications, including second-line renal cell carcinoma and second-line NSCLC. Opdivo is also being studied in dozens of additional combination studies, so closing the door on Opdivo's potential now after a single study failure simply isn't prudent.
Given Bristol-Myers' focus on oncology, Wall Street anticipates that its full-year EPS could double between 2015 and 2019. With Bristol-Myers historically paying out between 50% and 75% of its profits as a dividend, this would imply the possibility of big dividend increases to come. Meanwhile, investors can relish Bristol-Myers' superior 2.7% yield and above-average growth prospects.
Process this market beater
Steve SymingtonOpens a New Window. : Even after watching shares ofNVIDIA (NASDAQ: NVDA) double so far in 2016 as of this writing, I think the graphics chip specialist offers a compelling option for investors looking for a balance between share price appreciation and generous capital returns. Of course, the former speaks for itself. And as I wrote last monthOpens a New Window. , NVIDIA has a long history of both repurchasing shares (including 151 million shares bought back for $2.9 billion since fiscal 2013) and rewarding investors through its small but growing quarterly dividend (currently $0.115 per share, after being increased three times from $0.075 since NVIDIA initiated it in 2012).
But perhaps more important is that NVIDIA's GPU technology is playing a central enabling role for multiple fast-growing industries, helping total revenue last quarter to grow 24% year over year to a new company record of $1.43 billion. That included a 25% increase in NVIDIA's core GPU business, thanksto strength in datacenter and GeForce gaming GPU sales. And revenue from NVIDIA's younger Tegra processor business climbed 30% year over year to $166 million, driven primarily by a 68% increase in automotive sales.
To that end, the majority of NVIDIA's automotive revenue currently comes from chips powering infotainment systems in dozens of vehicle models. But with the help of new partnerships and itslatest Drive PX self-driving car technologyOpens a New Window. , NVIDIA is on track to crack the multi-billion dollar market for ADAS (advanced driver assistance systems). Over the past month, for example, NVIDIA struck separate collaborative agreements with TomTom for driverless-car mapping and withBaidu for a cloud-connected, AI-centric self-driving car platform.
All things considered, I think NVIDIA is ideal for investors with the foresight to get in early and hold the stock while its multiple growth stories play out.
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