BB Biotech, a publicly listed investment company with assets under management of around $3bn (£2.1bn, €2.8bn) says investing in biotechnology shares and earning a reasonable dividend yield can be compatible.
It 2016 the company plans to pay a dividend of CHF14.50 per share ($14.41, £9.98) which represents an increase of 25% over the previous year. This corresponds to a dividend yield of 5% which will be funded from capital returns.
Shareholders will vote on the proposed distribution on 17 March, 2016.
Dividends scarce
Given that of the 200 stocks in the Nasdaq Biotechnology Index only seven pay dividends, BB Biotech says its performance offers an alternative way to invest in the sector while avoiding the choice between dividends and capital growth.
“Biotechnology shares and dividends don’t have to be a contradiction in terms,” said Daniel Koller, who runs the fund on behalf of the fund’s manager, Bellevue Asset Management.
“BB Biotech offers both.”
Koller said capital growth in the biotech sector last year was very strong even in the difficult stock market environment of 2015.
Growth potential
“The solid fundamentals and positive outlook are manifested in the sector’s double-digit growth potential. Biotech companies are growing much faster than many other sectors around the world, in particular the pharma companies within the healthcare space.
“With BB Biotech, shareholders gain access to a well diversified portfolio with clearly defined investment priorities.”
BB Biotech’s share price rose 28% last year (in Swiss franc including the cash dividend) and topped the performance of the NBI benchmark index by 15% (in local currency).
Compared to the stocks in Germany’s DAX index, BB Biotech ranks among the top performers. Measured against the dividend yields on the Stoxx Europe 600, BB Biotech is situated among the top 100, and it is in the top quartile with the highest yielders in the FTSE 100. In the Italian Star Index BB Biotech also ranks among the top 10%.
BB Biotech is quoted in Germany, Switzerland and Italy and invests in high-growth, profitable biotechnology companies worldwide. It was founded in 1993.
