4 Undervalued Dividend Stocks To Buy, 1 To Avoid

Every portfolio must have pharmaceutical exposure to provide stability. It is easier said than done to identify great dividend-yielding stocks that enhance your portfolio through a solid, regular income stream. There are a wide variety of factors to consider, from the size of the company, the regularity of dividend payments, performance indicators and, for many income investors, the most important is the size of the dividend yield. Let’s examine fundamentals of five stocks on my radar which can provide stable income to your investments. The list includes five competitors GlaxoSmithKline, Bristol-Myers Squibb Company, Teva Pharmaceutical Industries Limited, Novartis AG, and Eli Lilly & Co. GlaxoSmithKline (GSK): GlaxoSmithKline is trading a forward twelve month price to earnings ratio of 12.59, price to earnings growth ratio of impressive 1.1 and high price to book ratio of 19.43. These numbers are attractive. GlaxoSmithKline’s return on equity is a solid 37.58% and dividend yield is a healthy 5.00%. GlaxoSmithKline has a relatively strong pipeline with at least 10 new drugs scheduled to complete phase III trials in 2012. Several have blockbuster potential in the $1 billion plus range. One thing I really like about GlaxoSmithKline is that the attempt to restructure the R&D effort…