Birth Control Stocks: A Recession Play

The birth rate in the United States has fallen to its lowest level in 2009, the lowest in a century, due to what many economists fear is a reaction to the recessionary economy. Last year, the birth rate dropped by over 2.5% on an increase in population. For many families, children are their biggest expense, and holing off on having a first or another can appear to be a significant cost savings to a parent. Based on this concern, investors turning to companies that are involved in contraception and birth control products. Here are a selection of birth control stocks. Obviously for some, contraception makes up a small part of their business.

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 9.8 times forward earnings and pays a yield of 1.3%. The price earnings growth ratio is a very favorable 0.78.

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 hme pregnancy kits. The stock sports a forward price to earnings ratio of 14, with a 1.1% yield. The PEG ratio is 1.27.

Pfizer Incorporated (PFE) makes Depo-Provera Contraceptive Injection which is injected every 3 months. The company also market birth control pills. The stock carries a high 4.5% yield with a forward PE of 7.0.

Johnson & Johnson (JNJ) owns Ortho-McNeil Pharmaceutical, which makes Diaphragms, and the combined oral contraceptive pill brands Ortho Tri-cyclen and Ortho-Evra. It trades at 11.5 forward earnings and provides a yield of 3.7%.

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 a nice yield of 4.4%, and a forward PE of 9.2.

To see all the companies involved in the production of contraception and birth control, go to WallStreetNewsNetwork.com.

Author owns PFE.


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