A Crack at One of the Fastest-Growing Sectors in the Market

Income investing to many people means picking up a few �go-to� industries. Utilities, energy producers and health care stocks are all obvious plays for anyone looking to lock in larger income. Unfortunately, it just isn�t that easy.

My portfolio has plenty of the first two categories. We have a handful of above-average utilities and energy stocks. But we have only one health care play. If you look at other income-focused portfolios, you�ll find a number of health care real estate trusts and pharmaceutical makers.

Now, we�re not unaware that changing demographics in this country and rapidly growing health care costs have made this a powerful sector. But the numbers are all wrong.

On the real estate side, there are still a number of issues concerning what the property should cost. So smart investors have to remain picky when it comes to hospital and retirement home REITs.

But when it comes to pharmaceuticals, we�re dealing with a whole other set of problems.

We have been covering the ongoing �patent cliff� in name-brand drugs for years now. Some $49 billion in annual pharmaceutical sales are at risk of losing their exclusivity.

And for a drug maker, that�s your most important asset…exclusive rights to make and sell your drugs.

This isn�t some far-off problem. Last year, industry leader Pfizer lost exclusive rights to Lipitor. That drug brings in � or, more accurately, brought in � more than $4.5 billion in annual revenues. That�s a sizable chunk of change.

Others have faced similar challenges. Eli Lilly lost exclusivity to Zyprexa � $1.9 billion in yearly sales. GlaxoSmithKline lost Advair � $4.7 billion in U.S. sales. The list goes on and on. There are also plenty of big drug patent expirations on the horizon. In fact, the majority of these problems are yet to come for most major companies.

Now that we are further along on this patent cliff, other potential plays are popping up. There is one company we recently released to our Lifetime Income Report subscribers…

Up until now, we�ve been a bit cautious to get into it, however. Its long and successful history didn�t give it a pass on this patent cliff problem. It was very much in trouble.

However, through all of this, the company still managed to generate $11.4 billion free cash flow and increase its earnings per share for the 28th year. It has been able to do that in face of some of the stiffest economic environments in history and its expiring patent issues.

And, it has ensured continued growth through their proactive portfolio transformations.

What really strikes us about this company�s approach is how, despite its long legacy, it refuses to be a dinosaur. Its current goal is to realize half of its health care revenue from products developed in the last five years. Considering the backward-looking industry it finds itself in, that�s great foresight…