Pharmaceutical Stocks To Buy Now
Covid-19 vaccines have been good to pharmaceutical giant Pfizer (NYSE:PFE). In fact, those vaccines helped the company report better-than-expected third-quarter earnings and raise guidance for the year. For the quarter, the company posted an EPS of $1.78, as compared to the $1.39 expected by analysts. Revenues were up to $22.6 billion, as compared to expectations of $21 billion.
pharmaceutical stocks to buy now
One of the oldest, and best pharma stocks on the market is Eli Lilly (NYSE:LLY). Founded by Civil War veteran, Col. Eli Lilly in May 1876, the company has become well known for its blockbuster drugs such as Prozac which is used to treat depression, as well as Cialis for erectile dysfunction. Those medications, and others, have powered Eli Lilly to annual sales of nearly $30 billion.
Persistent inflation and continued central bank tightening are testing the resilience of many investors, and healthcare stocks are good for both short- and long-term considerations. In the short run, they are considered a defensive hedge against inflation and a slowing economy since the demand for medical care remains constant no matter the macroeconomic environment. In the long term, a growing world population, especially among the aged, will raise demand for healthcare services.
But investors must be "choosy bulls in 2023," according to BofA. Jared Woodard, head of BofA's research investment committee and author of the report, suggests focusing on quality stocks in this environment.
With this in mind, here are the nine best healthcare stocks to buy now. Each name featured here has a free cash flow yield that is higher than 4%, attractive dividend yields and/or improving fundamentals.
Merck (MRK (opens in new tab), $106.24) is one of the largest pharmaceutical companies in the world. It develops and markets prescription medicines, vaccines and biologic therapies, as well as animal health and consumer care products.
But one of Wall Street's best healthcare stocks is ramping up its research and development efforts to find new drugs and offset those lost to patent expiration. These include a Keytruda-related lung cancer drug, a melanoma drug co-developed with Moderna (MRNA (opens in new tab)), and other pharmaceuticals.
Another reason AMGN is on this list of best healthcare stocks is its promising pipeline of drugs, including Repatha for cardiovascular disease, Lumakras for colorectal cancer and asthma drug Tezspire.
Bristol Myers Squibb (BMY (opens in new tab), $68.96) is one of the world's largest pharmaceutical companies that develops and markets prescription drugs, biologics and vaccines for cancer, diabetes, cardiovascular disease and many others. The size of one of Wall Street's best healthcare stocks today is the result of 19 acquisitions at a cumulative cost of more than $100 billion.
AbbVie (ABBV (opens in new tab), $153.90) is a specialty biopharmaceutical company that specializes in developing treatments for chronic and complex conditions such as various types of cancer, autoimmune diseases and neurological disorders.
In addition to being one of the best healthcare stocks, AbbVie is also one of the best dividend stocks to own. The company offers a consistent track record of increasing its dividend payments. Since 2017, the company's trailing dividend yield has risen from 2.7% to almost 4% at present. Last October, ABBV increased its dividend by 5% to $1.48 per share.
Moderna is one of the best healthcare stocks in this field and has a pipeline of potential treatments for a range of conditions. These include vaccines against respiratory syncytial virus (RSV), seasonal flu, and cytomegalovirus, which is the leading cause of birth defects in the U.S.
Stock market today: Pharma stocks have been skyrocketing today despite weak sentiments on Dalal Street. Pharma major Morepen Labs share price has ascended to the tune of 12.50 per cent, Shilpa Medicare share is up near 10 per cent, shares of IOL Chemicals and Pharmaceuticals has ascend around 6 per cent whereas Suven Pharmaceutical stocks are up over 3 per cent. Apart from these leading gainers from the pharma segment, shares of Aarti drugs, Caplin Point Lab, Granules India and Divi's Lab are also up by over 1 per cent.
According to stock market experts, pharma stocks are ascending on renewed fear of rising Covid-19 cases in the world. They said that current rise in pharma stocks are based on the speculative higher revenue and business coming in for the pharma companies in case the Covid cases continue to rise in near future. They said that Nifty Pharma stock has ascended around 2.5 per cent in last one week and it may continue to move northward. They said that Nifty Pharma has strong support at 12,520 and it is facing hurdle at 13,000 levels. They went on to add that on breaching this immediate hurdle, Nifty Pharma index may go up to 13,450 levels. On stocks that one ca look at from the pharma segment, experts said that Sun Pharma, Cipla and Glenmark Pharmaceutical shares are looking promising and one can look at these quality pharma stocks for short term gains.
Speaking on the reason for rise in pharma stocks despite weak sentiment in secondary markets, Avinash Gorakshkar, Head of Securities said, "Pharma stocks are rising due to the renewed fear of rising Covid-19 cases across work, especially in China. These stocks are rising on speculation that in case of further rise in Covid cases, these companies may have an additional business and avenue for revenue in near term. However, this is completely speculative and one should not jump to any conclusion till some concrete news comes on the front of rising Covid cases."
Pharma stocks to buy todayOn pharma stocks that one can buy in current market slump, Anuj Gupta of IIFL Securities suggested short term investors to look ta Cipla, Glenmark Pharmaceuticals and Sun Pharma. However, he advised investors to keep on booking profit and advised stock investors to avoid long positions in pharma stock in current market scenario.
Indiana-based pharmaceutical firm Eli Lilly employs more than 34,000 employees across 18 countries and sells its products in 120 different countries. The company was founded in 1876 by Colonel Eli Lilly, who was a veteran of the Civil War. One of the first products it developed was quinine, a medication used to treat malaria.
Abbott Labs was founded in 1888 and is headquartered outside of Chicago, Ill. The company is a large developer of pharmaceuticals and medical devices, including tests. Abbott is perhaps best known for some of its more innocuous consumables, such as PediaSure, Pedialyte and Similac. But, like other healthcare companies responding to the pandemic, it also has a Covid-19 test.
Each stock market sector comprises many industries, each with their own nuances, and healthcare is no different. Four of the most important of subtypes of stocks in the case of the healthcare sector include:
As defensive stocks, healthcare companies provide steady returns in any market. Because people will always need healthcare, the healthcare sector provides very steady, consistent returns that are uncorrelated with the overall direction of the stock market.
Disruption by new players is a constant threat for established healthcare stocks. More and more tech companies are getting involved in the healthcare sector. Firms like Amazon may significantly disrupt old ways of doing business. Nimble biotechs may outperform stodgy huge pharmaceutical firms.
Sustaining growth can be challenging for some types of healthcare stocks. Companies that make drugs and medical devices must convince health insurers and government agencies to continue buying their products. If these players fail to grant reimbursement approvals, their growth prospects can dim.
However, if you have a fairly high risk tolerance, a bear market represents a good time to take a chance on some stocks in the biotech industry. Stock prices are low, which means a potential for higher returns if you choose the right companies.
Some of the biotech stocks on this list are not household names. But most have tremendous revenue potential with promising drugs in various stages of development and successful drugs already available today.
Bio-Techne is a bit different from the other firms on this list. Rather than developing drug treatments, it supplies biological materials to other pharmaceutical and biotech firms for drug development and testing. It is also one of just a few companies on this list to offer a dividend.
Biotech stocks, especially in a bear market, can represent a tremendous value to investors with a moderate to high risk-tolerance. To mitigate risk, you might consider investing in a biotech ETF, like the iShares Biotechnology ETF (IBB) or the SPDR S&P Biotech ETF (XBI), instead.
Not every stock went down in 2022. Shares in some the biggest pharmaceutical companies rose in price. If you can make it in a market like 2022, imagine what can happen in 2023 for many top pharma stocks.
The bottom line is that the law will be less-effective than advertised, at least in 2023, with many provisions failing to take effect for years. Thus, the industry has time to adapt, giving investors time to load up on thee top pharma stocks.
Merck (NYSE:MRK) had a spectacular 2022, with its stock rising 44% as the average stock in the S&P 500 fell almost 20%. This brought the market cap of one of the top pharma stocks in the market to $280 billion in early 2023.
Amgen (NASDAQ:AMGN) stock managed to gain 17% in 2022, while the average S&P stock lost 20%. This is among the most valuable pharma stocks out there, with a market cap of approximately $139 billion, a price-earnings ratio 21-times, and a fat dividend yield of 3.2%
Biotech was in such a freefall that potential buyers just held off, waiting for better prices. Now that biotech stocks are stabilizing and product sales will start showing improvement, buyers will show more interest. Big Pharma certainly has the cash to buy, as you can see from this chart from Jefferies. 041b061a72