Earnings Miss? Amgen's Dividend Still a Bright Spot

Amgen Inc. AMGN stock is down about 1.4% in after-hours trading despite beating estimates on the top and bottom lines in its fourth quarter 2024 earnings report. Investors appear to be selling the news on the company’s latest obesity drug, AMG-513, which was placed on a clinical hold by the FDA. The drug entered Phase 1 trials late in 2024.

As for the report itself, Amgen reported earnings per share (EPS) of $5.31 on revenue of $9.09 billion. Both numbers beat analysts’ estimates for an EPS of $5.08 on revenue of $8.88 billion.

The key number appears to be the topline beat of 10%, which is psychologically important to investors who expect the company to be locked in a cycle that will cap revenue growth in the high single digits.

However, Amgen’s forward revenue guidance may also be behind the stock’s post-earnings slide. The company expects revenue to come in between $34.4 billion and $35.7 billion. The midpoint of that guidance is in line with analysts’ estimates. However, at the top end of that range, year-over-year revenue growth would come in at 6%. On the bottom line, the company expects EPS between $20 and $21.20, which is also in line with the analysts.

Swimming Against the Tide of Obesity Drugs

Investors were keenly interested to hear an update on Amgen’s obesity drug candidates, AMG-513 and MariTide. As noted above, the FDA has put AMG-513 on a clinical hold. Amgen says that it’s in discussions with the FDA to reopen the study, but investors are clearly selling first and looking at the details later. 

However, that’s not the company’s only entry into the obesity and weight loss market. In late November 2024, Amgen reported positive phase 2 clinical trial data for MariTide in patients who had used the product for 52 weeks. The results showed that patients experienced up to approximately 20% average weight loss without hitting a plateau.

MariTide has three key differences over the current GLP-1 drugs on the market, notably Wegovy from Novo Nordisk A/S NVO and Zepbound from Eli Lilly & Co. LLY.

MariTide is an injectable obesity drug that also contains glucose-dependent insulinotropic polypeptide receptor (GIPR) antagonists. These are engineered to block GIP hormone receptors that affect blood sugars, fat storage, and appetite.

Second, MariTide only has to be administered once a month or even less frequently. That removes one of the key objections for patients on current GLP-1 drugs that have to be taken weekly. 

And third, the early Phase 2 trial results showed that patients reported fewer side effects, particularly digestive ones. Those are typically a reason patients discontinue their weight loss drugs. However, Amgen reported only 11% of trial participants chose to stop taking the drug, and fewer than 8% did so due to digestive side effects.

The company is currently conducting the second half of that Phase 2 trial, and the drug will have to go through a Phase 3 trial before it can be commercially approved. The company confirmed that it is on track to begin sometime mid-year. However, investors will still have to wait before the impact of MariTide will make its way to Amgen’s top and bottom lines. 

A Dow Laggard, But Maybe Not For Long

Amgen is one of the 'Dogs of the Dow.' This is a list comprised of the 10 Dow Jones stocks with the highest dividend yield. These stocks have historically outperformed the broader Dow Jones Industrial Average (DJIA), which makes them attractive to investors.

Amgen made that list in 2024 and has a yield of 3.12% heading into earnings. The dividend also has annualized 3-year dividend growth of more than 8.5%, more than 50% higher than the average for medical stocks. So far, the strategy may be working. AMGN stock is up about 10.6% in 2025. However, it’s still down about 10.8% in the last 12 months. That still leaves plenty of upside for investors who are looking for growth and income.

And even though analysts have been lowering their price targets ahead of the earnings report, the consensus price target of $314 would present investors with an upside of 8% to go along with the attractive dividend.

In the short term, they’ll have to deal with a bearish chart. At around $289, the Relative Strength Indicator (RSI) indicates the stock is overbought. That could send the stock down around $273, which would approximate its 50-day simple moving average. At that level, the upside would be more difficult to pass up.