Healthcare Business

Why Big Pharmaceutical Stocks May Be the Best Place for Worried Investors Now

AstraZeneca also has an outstanding pipeline, especially in oncology. The broad pipeline of next-generation investigational medicines is focused on four main disease areas: ovarian, lung, breast and haematological cancers. These are being targeted through four key platforms: immuno-oncology, the genetic drivers of cancer and resistance, DNA damage repair and antibody drug conjugates.

Shareholders receive a very reasonable 3.12% dividend. The Merrill Lynch price objective for the stock is $51.70, and the posted consensus target is $53.05. AstraZeneca stock closed most recently at $44.53, up just shy of 5% on Monday.

Bristol-Myers Squibb

This remains a solid pharmaceutical stock to own and is on the Merrill Lynch US 1 list of top stock picks. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

After the company reported solid fourth-quarter results, Merrill Lynch noted this:

Bristol reported strong 4Q results (though largely ahead of Street given the recognition of Celgene revenue). We highlight the 2020 / 2021 provided guidance as the key focus for investors, as well as +$5 billion increase in share repurchase. While guidance comes in light, we expect the results to be viewed favorably by the Street and look for share strength.

Shareholders receive a solid 3.30% dividend. The $75 Merrill Lynch price target is above the $70.82 consensus figure. Bristol-Myers Squibb rose just over 3% on Monday and closed at $54.39 a share.

Eli Lilly

This is another company with solid upside potential, and it is a superb place for long-term conservative growth investors. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.

The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.

Eli Lilly results also came in strong for the fourth quarter, and the Merrill Lynch analysts said this:

With a strong close to 2019, Lilly’s industry-leading top- and bottom-line growth appears on track to continue in 2020. 2020 is shaping up to be a big year of clinical and regulatory catalysts across all of Lilly’s core franchises. Discontinuation of pegilodecakin, while a disappointment for Lilly’s oncology franchise, was already removed from our model.

The dividend yield is 2.19%. The Merrill Lynch price objective is $155. The consensus target is $146.14, and Eli Lilly stock was seen trading at $138.44, after a gain of 3.2% on Monday.

Four top stocks have been hit hard, are rated Buy and have come with dependable dividends for years. Given that the market remains very volatile, and first-quarter earnings are right around the corner, it may make sense to buy partial positions now and see not only how the earnings come in, but what the forward statements and estimates look like.

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