Saturday, October 15, 2011
Birth Rate Drops, Contraception Skyrockets Due to Recession: Top Birth Control Stocks
A recent study by the Pew Research Center shows that women are less likely to have children when the economy is bad. It discovered that states that tanked from an economic standpoint in 2007 and 2008 had the greatest drop in births in 2008 and 2009. The number of births dropped by more than 300,000 from 2007 to 2010. The birth of white babies dropped by 1.6%, African American Births fell by 2.4%, and Hispanic births dropped 5.9%.
This shift has caused closures of fertility clinics and birth centers across the nation. It has also triggered a significant increase in the use of birth control, and the companies that market contraception are benefiting. Birth control makes up a small portion of the business of many of the companies in this industry. However, more than half of the birth control stocks pay dividends.
One example is Pfizer Incorporated (PFE), whcih makes Depo-Provera Contraceptive Injection, a type of contraceptive which is injected every 3 months. The company also markets birth control pills such as Lybrel and Loestrin. The stock carries an outstanding 4.3% yield and trades at 8.4 times forward earnings.
Merck (MRK) is the manufacturer of the NuvaRing, a combined hormonal contraceptive vaginal ring available by prescription and Implanon, a single-rod long acting reversible hormonal contraceptive birth control subdermal implant that is inserted just under the skin of the upper arm. The stock has an even higher yield of 4.6%, and a forward price to earnings ratio of 8.6.
Johnson & Johnson (JNJ) owns Ortho-McNeil Pharmaceutical, which makes diaphragms, and the oral contraceptive pill brands Ortho Tri-cyclen and Ortho-Evra. It trades at 12.3 times forward earnings and provides a yield of 3.5%.
Teva Pharmaceutical Industries Ltd. (TEVA) produces various pharmaceuticals including women's health care products, oral contraceptives, and intrauterine contraception. The company owns Barr Pharmaceuticals, Inc., which owns Duramed Pharmaceuticals, Inc., which makes the ParaGard T-380A, a copper-T IUD, the only copper-containing intrauterine device approved for use in the U.S. The stock trades at 6.9 times forward earnings and pays a yield of 2%.
Church & Dwight Co., Inc. (CHD), producer of household, personal care, and specialty products, is probably most known for it Arm & Hammer baking soda product. The company makes and markets the Trojan brands of prophylactics. In addition to condoms, it also produces home pregnancy kits. The stock sports a forward price to earnings ratio of 18.8, with a 1.6% yield.
To see all the companies involved in the production of contraception and birth control, go to WallStreetNewsNetwork.com, to access the free down-loadable list.
Disclosure: Author owns PFE.