courtesy of motley fool
- The company cut its sales and profits guidance for fiscal 2017 and slashed its top-notch dividend by 75% to $0.085 a quarter.
- Weaker generic-drug pricing is weighing on the company, which is a problem given that Teva is the largest generic-drug maker in the world.
- It's buried under $35.1 billion in debt, mostly from its recent acquisition of generic-drug maker Actavis, and it's being forced to sell non-core assets to improve its financial flexibility.
- Its CEO and CFO both left following a bribery settlement in three foreign countries.
- Copaxone, the company's leading brand-name product that accounts for close to 20% of total sales, is expected to face generic competition next year.
Finally, just keep in mind that as the top generic-drug maker in the world, the long haul numbers are on its side. Within the U.S. alone, the elderly population is expected to nearly double from 48 million in 2015 to 88 million by 2050, according to the U.S. Census Bureau. Since the elderly are more likely to take prescription medicines, Teva is uniquely set up to see its demand for generic products rise. Even if margins remain challenged, volume can prove to be a moneymaking tool for Teva.
At just five times forward earnings and boasting a 2% yield even after the dividend cut, Teva looks worthy of value- and income-seekers' consideration.
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