Trading Guidelines for J&J, Merck, Pfizer, 8 Other Drug Companies

NEW YORK (TheStreet) -- Investors have so many choices when allocating cash to pharmaceutical stocks that making prudent decisions can be difficult.

But there are ways to cut through the clutter, if investors consider the numbers.

Read more: 4 Stocks Warren Buffett Is Selling in 2014

There are 11 pharmaceutical stocks with market capitalizations above $50 billion. Three are components of the Dow Jones Industrial Average, with Johnson & Johnson (JNJ)  up 14% year to date, Merck (MRK)  up 19% and Pfizer (PFE)  down 3.8%, compared with the Dow, which is up 2.7%.

Pharmaceutical stocks aren't as volatile as biotechnology stocks, but some have drugs in development, which makes them sensitive to positive or negative reports from the U.S. Food and Drug Administration.

The first "crunching the numbers" table shows that the biggest year-to-date gainers are Eli Lilly (LLY) up 28%, Novo-Nordisk (NVO) up 29%, and AstraZeneca (AZN) up 23%.

Four companies have 12-month trailing price-to-earnings ratios above 20.0. Bristol-Meyers (BMY) has the highest P/E at 27.1.

Big-cap pharmaceuticals have dividend yields, though most biotech stocks don't. GlaxoSmithKline (GSK) may be the biggest year-to-date loser, down 12% but that is partially offset by a dividend yield of 5.5%.

All 11 stocks in the first table have rising or overbought 12x3x3 weekly slow stochastics, and only GlaxoSmithKline is below its five-week modified moving average.

Let's take a look at each stock's all-time or multiyear high, versus the risky levels in the second table.

Abbott Labs (ABT) ($42.56) set an all-time intraday high of $43.27, and this week's risky level is $43.54.

AstraZeneca ($73.94) set an all-time intraday high of $82.68 on May 1, and this month's risky level is $85.23.

Bristol-Meyers ($50.69) set a multiyear intraday high of $57.49 on March 6 and then faded to a close on Thursday below its 200-day simple moving average at $50.90 with quarterly and semiannual risky levels at $52.96 and $53.18, respectively.

Read more: Merck's Future Looks Healthier

If you liked this article you might like

The Best Companies for Women

Fight Off Complacency: Cramer's 'Mad Money' Recap (Fri 9/15/17)

Alibaba, Qorvo, Abbott Laboratories, Square: 'Mad Money' Lightning Round

Walmart Is One of 63 Companies Contributing Massively to Aid Harvey Relief