In her The MoneyPaper, editor Vita Nelson looks to stocks offering dividend reinvestment plans. Here, she highlights Abbott Laboratories (NYSE: ABT) as a featured holding in her model portfolio.

"Abbott is a diversified, multinational, health care firm.The shares have not responded to the recent stock market rallies in part due to the defensive nature of health care stocks.

"Uncertainty regarding health care reform is also a factor in the static share price of recent months. ABT shares are now trading below 11 times 2010 earnings estimates, compared with about 15 for the S&P 500.

Pharmaceutical company Eli Lilly & Co. (NYSE: LLY) is planning to cut 5,500 jobs over the next few years and reorganize into five business units. The company is looking to reduce costs and accelerate how long it takes new drugs to get to market, especially as its top performers see their patents expire. This translates to a workforce reduction of close to 14% – to 35,000. This measure doesn't include new positions in emerging markets with high potential and Japan.

The company hopes to cut as much as possible through attrition and retirements – and it would not indicate how many other positions would have to be cut.

Eli Lilly's goal is to slash its annual cost by $1 billion during this restructuring. The new business units will be: cancer, diabetes, established markets, emerging markets and Elanco, which is its animal health business. This is a change from the existing functional model, which separates U.S. and global marketing for each drug in the company's portfolio. Through the new structure, Lilly says, drug development and marketing will be tied more closely.

After the closing bell rang yesterday, Amgen (NASDAQ: AMGN) announced a second-quarter profit that increased 40% compared to a year ago. The company earned $1.29 per share compared to 84 cents per share a year ago. Not only did the pharmaceutical firm top its previous-year results, but it also outpaced the Street's estimated earnings of $1.16 per share.

Quarterly revenue dropped to $3.71 billion from $3.76 billion a year ago, but AMGN still topped the consensus revenue estimate of $3.58 billion. Total product sales for AMGN increased 1% when taking the impact of foreign exchange out of the equation. Looking ahead, AMGN forecast full-year adjusted earnings between $4.80 and $4.95 per share, far better than its earlier forecast of $4.55 to $4.75 per share and the Street's expected $4.57 per share.

"Stocks are likely in a new downtrend," says Michael Ashbaugh. In Marketwatch's The Technical Indicator, he looks at the S&P's prospects and some drug stocks set to buck the trend.

"The S&P 500 has violated its major moving averages in the closely tracked 900 area. The recent downturn was convincingly bearish, placing the burden on market bulls to reassert the uptrend.

"After finding resistance in the 923 area, the S&P sold off sharply, edging back under its 200-day moving average, which currently holds at 900 and now marks resistance. This is bearish price action.

"India-based Dr. Reddy's Laboratories (NYSE: RDY), a generic-drugs play with solid market positions in India, Russia, the US and Germany," says Asian stock expert Yiannis Mostrous.

In his specialty newsletter, The Silk Road Investor, he explains why he has chosen the firm as his latest "Stock of the month".

"Seventy percent of the firm's growth comes from generic drugs, and the trend there has been favorable. New products, market share gains and a revamp of the supply chain in India should contribute to profitability. The company is also building a proprietary pipeline to supplement it core business.

In a review of the pharmaceutical sector, Chuck Carlson selects his favorite International stocks which also offer direct-purchase plans for U.S. investors.

Here's a look at two of these stocks -- United Kingdom-based AstraZeneca (NYSE: AZN) and Denmark-based Novo Nordisk (NYSE: NVO) -- from his The DRIP Investor, a newsletter focused on long-term, high quality investments.

"AstraZeneca is a leading pharmaceutical firm. The company boasts a portfolio that includes 11 products that generate more than $1 billion each in annual sales.

"Health-care stocks have been volatile of late, as the prospects for significant healthcare reform are impacting the group," notes Chuck Carlson.

In The DRIP Investor, he explains, "Johnson & Johnson (NYSE: JNJ) has not been immune to the weakness. And while these shares could remain under pressure in the short run, the company's prospects are significantly brighter than the typical health-care stock."

"First, Johnson & Johnson's diversified business portfolio, which includes pharmaceuticals, medical technology, and consumer products, should help to smooth out results and cushion declines in any one area.

Pfizer (NYSE: PFE), a pharmaceutical entity whose colleagues include Merck (NYSE: MRK), Novartis (NYSE: NVS), and Johnson & Johnson (NYSE: JNJ), will be reporting first-quarter earnings Tuesday. As one has come to expect, the market believes that the company will be experiencing a decline in bottom-line income. The call is for 49 cents per share versus 61 cents per share in the year-ago period.

That's a drop of 20%. That might not sound so hot, but the good news is that Pfizer has a solid recent track record when it comes to beating earnings expectations. So shareholders might be justified in feeling confident about that aspect of the game.

"Abbott Laboratories (NYSE: ABT) is continuing its long record of rewarding shareholders," notes Alex Kolb In Zacks Elite, pointing to its 341st consecutive quarter of dividends since 1924.

"Abbott is a global, broad-based health care company that develops, manufactures and markets pharmaceuticals and medical products, including nutritionals, devices and diagnostics.

"The company employs more than 68,000 people and markets its products in more than 130 countries.

"The company recently released new data, showing that a combination of its new TriLipix triglycerides medicine and a low dose of AstraZeneca's Crestor cholesterol drug are better than the individual pills for treating heart problems.

"Long-time healthcare investors can be forgiven their confusion; drug stocks are supposed to be defensive, but many of the largest drugmakers have been pounded," observes Richard Moroney.

Nevertheless, in the blue chip Dow Theory Forecasts, the advisor sees two favorite healthcare and pharmaceutical issues as long-term opportunities: AstraZeneca (NYSE: AZN) and Johnson & Johnson (NYSE: JNJ).

Moroney explains, "Healthcare companies' profits are supposed to remain fairly steady regardless of the economic situation. But hospitals' capital spending fell in the December quarter, and many consumers are putting off medical care because they cannot afford it.

The shares of Dow component Pfizer Inc. (NYSE: PFE) slipped to a fresh 52-week low out of the gate this morning, after the pharmaceutical firm said it was canceling development of two experimental drugs in late-stage trials. Pfizer is scrapping work on esreboxetine, a fibromyalgia treatment, and PD 332,334, a drug for generalized anxiety disorder, because "it was considered unlikely that either compound would provide meaningful benefit to patients beyond the current standard of care."

Currently, Pfizer is fumbling to find a replacement for its successful cholesterol drug, Lipitor, which loses patent protection in 2011. The pharma firm isn't having much luck, though. Two late-stage drugs for pancreatic cancer and for obesity were also recently dust-binned after disappointing study results.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"Biogen Idec (NASDAQ: BIIB) -- which has a highly effective though risky treatment for multiple sclerosis called Tysabri -- is our top pick for 2009," says analyst Richard Moroney.

The editor of Dow Theory Forecasts, an advisory that has been published for more than 50 years, explains, "Despite superior growth prospects, the Tysabri concerns have kept Biogen's shares under pressure.

"In the past two months, consensus profit estimates have crept upwards for Biogen Idec. Per-share profits are expected to climb 33% in 2008 and 9% in 2009. Over the next five years, profits are expected to climb 12% annually. Two factors support this outlook.

"First, Biogen plows nearly a third of its revenue into research and development, raising expectations of a fertile lineup of new drugs. Second, there's Tysabri, a highly effective though risky treatment for multiple sclerosis.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"Johnson & Johnson (NYSE: JNJ) is an a typically defensive industry and has held up much better than most stocks during the past year," says John Reese, who selects the issue has his favorite stock for 2009.

In his Validea -- a newsletter that screens stocks based on the criteria used by legendary investors -- he assesses Johnson & Johnson based on his Warren Buffett and Peter Lynch models.

"The health care and pharmaceutical giant has dipped about 10% over the past year compared to the broader market's 40% plunge.

"In addition, the company has the size ($163 billion market cap) and breadth (250 operating companies and big brand names like Tylenol, Band-Aid, and Neutrogena) to withstand continuing trouble in the economy.

"Johnson & Johnson's price dip this year has only made it more of a bargain according to two of my Guru Strategy computer models, each of which is based on the approach of a different Wall Street great.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"My top idea for 2009 is Myriad Genetics (NASDAQ: MYGN)," says Mike Cintolo. In The Cabot Market Letter, he looks at "the leader in the new field of cancer predisposition testing."

"Myriad Genetics five tests on the market (covering colon, breast, ovarian, and skin cancer) that tell a patient if his genes make it more likely that he'll get various types of cancer.

"During the past few quarters, revenues from these tests have risen at a 50% annual clip, and there's no sign of that slowing down.

"The company also has a pharmaceutical division, but it's going to spin that off sometime in 2009. That should be a big positive, as the drug development division carries good potential, but also big-time costs. Once the cancer predisposition testing division is on its own, much of that revenue growth is going to fall to the bottom line.

It's been a tough year for many industries -- there's no denying it. Retailers of all stripes, oil companies, construction firms, financials, basic materials companies -- you name it, it's down.

So, are there any safe havens?

Historically, in times of economic uncertainty the pharmaceutical industry, along with consumer staples, is often the "go to" place where, at a minimum, you can count on a nice dividend yield to shield your portfolio from gigantic losses. Not anymore.

In this downturn even stalwarts such as Merck (NYSE: MRK) and Pfizer (NYSE: PFE) trade near their multi-year lows, despite offering generous yields.

What about biotechs? That sector has performed much better.

However, one of my favorite biotech names, Elan (NYSE: ELN), is struggling.

At the start of the year, ELN was looking strong. Its stock was up by 50% by mid-summer. Since then shares have collapsed and now trade in the mid-single digits.

I profiled the company on July 2, with one caveat: If late-stage testing of a new Alzheimer's drug called bapineuzumab doesn't go as planned, then ELN will trade lower.

About a month later, the company announced that the results of a Phase II clinical study showed the drug does safely treat the symptoms of Alzheimer's disease, but the results were not statistically significant, and the 234-person Phase II study would have to be broadened to a much larger Phase III study to be considered for FDA approval.

The shares fell 17% on the announcement, but that was just the start. As is often the case, when it rains, it pours.