Dividends as Portfolio Anchors: Familiar Names Sanofi and BB Biotech – Hidden Gem RE Royalties

Sanofi: Stability Through Operational Transformation

The French pharmaceutical group Sanofi presents itself as a classic defensive anchor of stability. In fiscal year 2025, revenue rose by 9.9% to EUR 43.6 billion, driven primarily by the continued success of the blockbuster drug Dupixent. The company recently proposed a dividend of EUR 4.12, marking the 31st consecutive increase. This makes it clear: Sanofi stands for absolute reliability. In February of this year, the group announced a strategic leadership change: Belén Garijo, who previously led Merck KGaA, will take over the CEO position from Paul Hudson in the coming weeks to boost research productivity. Analysts at Bank of America subsequently downgraded the stock to "Neutral" due to concerns about a transition phase. Future upside potential stems primarily from the successful integration of acquisitions such as the takeover of Dynavax, while the dividend is optimally secured thanks to strong free cash flow of EUR 8.1 billion.

BB Biotech: Returns Thanks to Expertise and Innovation

The Swiss investment firm BB Biotech provides access to a specialized biotech portfolio. The company closed 2025 with a record profit of CHF 578 million. The strict dividend policy provides for an annual payout of 5% of the average December share price, which corresponds to CHF 2.25 per share for 2025. To enhance fundamental stability, management has recently focused the portfolio heavily on clinically mature and market-leading companies such as Ionis Pharmaceuticals and Argenx. Although BB Biotech provided a somewhat more cautious outlook for 2026, a new share buyback program covering up to 10% of the capital provides downside protection. The dividend is directly linked to investment performance but offers an excellent risk-reward profile with significant upside potential driven by upcoming clinical trial data.

RE Royalties: The Undiscovered Anchor of Stability

By far the most exciting approach comes from the Canadian company RE Royalties, which, as a pioneer in its sector, has applied the proven royalty model to renewable energy. The company provides capital to developers of solar, wind, or battery storage projects and, in return, receives a percentage share of gross revenue. This specific structure largely shields revenue from inflation-driven cost increases for operators and ensures stable cash flows through long-term power purchase agreements. The diversified portfolio already includes over 100 royalty agreements in North America, South America, and Asia. With a consistent quarterly dividend of CAD 0.01, the stock boasts an expected dividend yield of well over 10%.

Scalability and Excellent Interest Margins Drive Growth

A key success factor for RE Royalties lies in the asymmetric financing structure and the model's enormous scalability. By providing project developers with non-dilutive capital, they retain their voting rights and equity stakes, which drives demand for this financing instrument in the cleantech sector. At the same time, RE Royalties benefits from an excellent interest margin. While the company refinances itself via green bonds with an interest rate of around 9%, the licensed investments it makes typically target double-digit returns. Just how attractive this business is in practice is demonstrated by a recent letter of intent for a USD 8 million loan for a wind project in the US, which secures the company a 5% royalty on gross revenue over the entire lifetime of the facility. Since RE Royalties does not operate the renewable energy plants itself, the cost structure remains lean, allowing additional licenses to boost profits with a minimal increase in operating expenses. With a well-stocked investment pipeline of over CAD 200 million and a listing in Germany designed to specifically attract European capital, the foundation for the next phase of growth is solid.

Strategic Review as a Share Price Driver

In addition to its exceptionally high and operationally robust dividend, RE Royalties is also drawing attention for its share price potential. The company has been awarded the highest "Dark Green Rating" by sustainability analysts at S&P Global and successfully refinanced itself through green bonds. To finally reflect the company's hidden intrinsic value in the capital market, management recently launched a comprehensive strategic review with external financial advisors. The goal of this initiative is to explore lucrative options such as a full sale of the company or strong strategic partnerships. For investors, this creates a rare opportunity: they receive a double-digit dividend yield from a sustainable infrastructure business while simultaneously holding significant leverage toward an imminent revaluation of the stock.