Gilead Sciences: A Value Stock with Dividend Yield and Growth Potential
Gilead Sciences (GILD) has not provided significant returns for shareholders in the past decade, but recent signs indicate a potential reversal. The company pays a substantial dividend yield of 4.61%, almost equivalent to the 10-Year Treasury yield, offering income and growth potential.
Furthermore, GILD trades at attractive valuations, with trailing earnings and revenue multiples below the market average. Analysts anticipate a moderate decline in earnings in FY2024, but a robust rebound in FY2025 driven by growth in oncology and cell therapy.
Gilead holds a dominant position in the HIV space and has a promising pipeline in oncology, cell therapy, and inflammatory diseases. The acquisition of CymaBay Therapeutics further strengthens its pipeline, although the company’s high debt level may limit future M&A activity.
Given its low valuation and high dividend yield, Gilead Sciences appears undervalued. Investors may consider covered call strategies to mitigate downside risk while enhancing returns. With its leadership in HIV and promising pipeline, GILD offers potential for both income and growth in the long run.
