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7 Big-Pharma Stocks With Untapped Potential

7. Bayer (BAYRY)

Company profile: Bayer, the international German health-care and chemical conglomerate, with a market value of $63 billion, has three business units: health care, crop science; which makes pesticides and herbicides; and material science, which makes plastics materials. Health care provides half of the company's revenue and includes pharmaceuticals, vitamins, blood glucose monitors and animal-health products.

Dividend Yield: 2%

Investor takeaway: Its shares are up 28% this year and have a three-year, average annual return of 21.4%. Morningstar says Bayer "is one of the best positioned firms in emerging markets. It earned 32% of its health-care revenue from emerging markets in 2011, and recently restructured to facilitate significantly increased investment in the regions. We expect the sales contribution from emerging markets to grow to 43% by 2015."

The German company gets little U.S. analyst coverage. On July 31, it raised its 2012 revenue and earnings forecasts saying it expects revenue growth of 4% to 5% this year to about $48 billion, citing increased sales of crop chemicals and drugs as well as favorable exchange rates, which sent its shares to the highest price in more than four years.

6. AstraZeneca (AZN - Get Report)

Company profile: AstraZeneca, based in the U.K. and with a market value of $59 billion, has a product portfolio that includes gastrointestinal, cardiovascular, respiratory and neuroscience therapies. Emerging markets made up 17% of revenue last year and less than 40% of revenue comes from the U.S.

Dividend Yield: 6.04%

Investor takeaway: Its shares are up 8% this year and have a three year, average annual return of 6.2%. Analysts give its shares one "buy" rating, one "buy/hold," six "holds," and one "weak hold," according to a survey of analysts by S&P.

S&P, which has it rated "sell," says it expects 2012 sales to decline about 12% from 2011's $32.3 billion, due in part to lower sales of the proton pump inhibitor Nexium, which faces increased competition. Analysts' consensus estimate is for earnings of $5.82 per share this year, and $5.89 per share next year, a 1% increase.

5. Sanofi (SNY)

Company profile: Sanofi, of France, with a market value of $110 billion, is among the world's largest drugmakers, producing a wide range of prescription pharmaceuticals and vaccines. Emerging markets accounted for about 30% of its sales of $49 billion last year. "The company was among the first to enter Russia (1970) and China (1982) as well as several other markets," which bodes well for its long-term prospects, said Morningstar.

Dividend Yield: 3.4%

Investor takeaway: Its shares are up 18.5% this year and have a three-year, average annual return of 11.8%. Analysts give its shares three "buy" ratings, one "buy/holds," and three "holds," according to a survey of analysts by S&P. Analysts' consensus estimate is for earnings of $3.75 per share this year, rising to $3.82 per share next year.

4. Abbott (ABT - Get Report)

Company profile: Abbott, with a market value of $104 billion, offers a wide range of prescription pharmaceuticals, infant and adult nutritionals, diagnostics and medical devices. Morningstar says the company "has shot up the ranks in emerging markets through acquisitions." In 2011, it invested $4.1 billion, or 10.6%, of sales, in research and development. Foreign sales accounted for 59% of total sales in 2011.

Dividend Yield: 3.09%

Investor takeaway: Its shares are up 20% this year and have a three-year, average annual return of 17%. Analysts give its shares five "buy" ratings, five "buy/holds," 11 "holds," and one "sell," according to a survey of analysts by S&P.

S&P has it rated "buy," with a $74 price target, a 12% premium to the current price. Analysts' consensus estimate is for earnings of $5.05 per share this year, rising 6%, to $5.36 per share, next year.

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