The Motley Fool

AstraZeneca plc Could Be Worth 3915p

AstraZeneca (LSE: AZN) (NYSE: AZN.US) is a company that has had its fair share of problems over the last few years.

Indeed, its pipeline of potential new drugs has been poor and it is suffering from reduced revenue (and, therefore, reduced profits) as many of its ‘blockbuster’ drugs come off patent and are exposed to a large degree of generic competition.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

However, despite this, AstraZeneca remains a very high-yielding stock whose dividend is aiming to be at least maintained by current management on a per share basis.

Of course, value investors will be well-aware that a key measure of value in any stock is the yield, with a high yield indicating that shares could be cheap. With shares in AstraZeneca currently yielding an impressive 5.3%, this not only puts it at number 4 on the top-yielding list of FTSE 100 shares but also indicates that shares could be good value at current levels.

Indeed, with the FTSE 100 yielding just 3.5%, AstraZeneca appears to offer extremely good value for money, with shares offering a 50% higher yield (5.3% versus 3.5%) than the index.

Even if shares were to offer a yield of 4.5%, this would still represent a premium of 28.5% to the wider market. Furthermore, with management aiming to at least maintain the current level of dividends per share, a yield of 4.5% would mean that shares trade at a price in excess of 3900p. This would represent a gain of 18.5% versus the current share price.

Add to that potential gain an annual yield of 5.3% and it is clear that there is upside potential for investors in AstraZeneca.

Moreover, dividends are well-covered even with further declines in revenue and earnings taken into account. For instance, in 2014 dividends are forecast to be covered 1.6x by earnings and, although further earnings falls are expected in future years, AstraZeneca is forecast to continue making its current dividend per share dividend payments for the next few years.

Clearly, the future remains uncertain for AstraZeneca. However, with a well-covered dividend and shares that could offer upside of 18.5% plus a yield of 5.3%, it seems as though shareholders could be handsomely compensated.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

>Peter owns shares in AstraZeneca.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.