More Talk About Dividends, and Those Hit Canadian Drugs Yielding 6.10 Percent

According to the lead story in Barrons' this week, dividend yield is being talked about among the opinion class:

"I call it libertarian capitalism," says Jim Tisch, the company's CEO. "The shareholder has the ability to decide. If the shareholder is in favor of a share repurchase, he can use the dividend to purchase shares -- in which case he would be in essentially the same position as if the company bought in shares." If a shareholder wants cash, he or she can just bank the dividend.
Tisch also is CEO of Loews, the New York conglomerate controlled by the Tisch family. Loews owns 50% of Diamond Offshore.

University of Pennsylvania professor Jeremy Siegel notes that special annual dividends were common among cyclical companies in 1950s and 1960s: "General Motors used to do it all the time. It was like a Christmas present to shareholders."

Despite the benefits of dividends, the stock-repurchase habit is tough to break. But in the long run, companies that kick it may do more for their shareholders than any buyback can accomplish.

Meanwhile, there's the little matter of a Canadian drug company that kicks off 6% from the sale of a host of household drug names. Biovail, symbol: BVF, is responsible for the following parade of potions that offer relief from many conditions. These include:

It offers Zovirax Cream, an antiviral medication, for the treatment of herpes labialis; Wellbutrin XL to cure depression in adults; Ultram ER, an extended-release formulation of ramadol hydrochloride (HCl), used in the treatment of chronic pain in adults; and Cardizem LA, an extended release formulation of diltiazem HCl that provides blood pressure control. Biovail also provides Tiazac, a calcium channel blocker (CCB) for treating hypertension and angina; Wellbutrin SR used in the treatment of depression; Monocor, a cardio-selective beta-blocker for treating mild to moderate hypertension and congestive heart failure; Retavase, a tissue plasminogen activator used in thrombolytic therapy; and Glumetza to control hyperglycemia in adult patients with non-insulin dependent and mature onset diabetes. Its legacy products comprise Cardizem branded products, which are medications in the CCB category of cardiovascular drugs; Ativan for the management of anxiety disorders, short-term relief of anxiety, or anxiety associated with symptoms of depression; Vasotec and Vaseretic for the treatment of hypertension, symptomatic congestive heart failure, and asymptomatic left ventricular dysfunction; Tiazac; and Isordil, a coronary vasodilator, to treat prophylaxis of ischemic heart pain associated with coronary insufficiency. The company's generic products consist of bioequivalent formulations of Cardizem CD, Adalat CC, Procardia XL, Tiazac, Voltaren XR, and Trental.

In spite of some major headline risk, as it's found faces investigation for his personal trading and the company faces an investigation for its reporting, BVF trades well above it's 200 day moving average, but within it's Bollinger bands, with a price for earnings multiple topping 17, but in light of the choice for yield paying companies, one could do worse. BVF's chart has a slow and steady look about it since it's drop off in Sept. 2006. A pullback based on the company's more recent reporting issues should present and even better payout as long as the dividend is not cut. Six percent is a good starting point to look for profits from pills.