Pharmaceutical companies’ stocks consist of businesses focused on the research, development, manufacturing, and sales of drugs for the treatment of diseases and sicknesses. Pharmaceutical stocks have witnessed a surge following the discovery of the Covid-19 vaccine.
This guide highlights some of the Best Pharmaceutical Stocks to buy this year, including the best brokers who sell top pharmaceutical stocks.
In This Guide
You can invest in all these top pharma stocks and more on eToro, our recommended stock broker that allows you to buy and sell stocks with no commission!
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Now, let’s see why the ten best pharmaceutical stocks we’ve profiled are worth considering for your portfolio.
BioNTech (short for Biopharmaceutical New Technologies) is a developer and manufacturer of active immunotherapies for patient-specific purposes for the treatment of diseases. Based in Mainz, Germany, BioNTech develops pharmaceutical products based on messenger ribonucleic acid (mRNA) for use in individualised cancer immunotherapies, protein replacement therapies for rare diseases, and also engineered cell therapy.
Following the global pandemic, BioNTech partnered with US biotech giant Pfizer to manufacture its own Covid-19 vaccine. The partnership proved successful with the Pfizer-BioNTech Covid-19 vaccine receiving regulatory approval following a 95% efficacy in adults. The Pfizer-BioNTech vaccine has recently been approved for booster shots by the UAE Ministry of Health and Prevention. BNTX has had a stellar year so far. Beginning the year at a little over $100, BNTX surged to a 52-week high of $463.14 on August 11 before tapering down. It has not been able to reclaim its previous high since the subsequent dip. However, the BNTX stock has largely traded above the 20-day moving average (MA) price of $200 for the most part of the year.
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Occupying a top position on the list of multinational biotechnology companies, JNJ is an American multinational company focused on manufacturing medical devices, pharmaceuticals, and consumer packaged goods. However, JNJ derives the bulk of its revenue from its pharmaceutical business with immunology drugs Stelara and Tremfya, and the cancer drugs Darzalex and Erleada are best sellers.
The healthcare giant has been on the frontline in the fight against the Covid-19 pandemic with its single-dose vaccine Janssen. The appeal for the product has greatly waned after side-effects were detected earlier on in the year. However, Johnson & Johnson is still in a good position to benefit from the pandemic should the US Food and Drug Administration (FDA) approve Janssen for the entire US populace.
For now, Janssen has Emergency Use Authorisation (EUA) approval for individuals age 18 and above. JNJ stock has been on an uptrend for the majority of this year. Starting at $153.49, JNJ surged 15% to $170.34 in early January. Like several pharmaceutical stocks, JNJ hit a major high in mid-August and jumped to $178.86, coming from a June low of $160.94. At press time, JNJ stock is trading in the red zone following the company’s efforts to gain approval for its Covid-19 vaccine.
Based in Massachusetts, US, Moderna is a pharmaceutical and biotech giant that focuses on vaccine technologies based on messenger RNA (mRNA). Moderna’s technology inserts synthetic nucleoside-modified messenger RNA (modRNA) into cells.
The mRNA then reprograms the cells to enable an immune response to external attacks. SpikeVax is authorised to be used by individuals 18 years and older by the US FDA. With a 94.1% efficacy in adults, SpikeVax has received clearance by the European Medicines Agency (EMA) for adults and children 12 to 17 years old.
The MRNA stock is one of the top-performing pharmaceutical stocks so far this year. MRNA has averaged $200 in the volatile markets after hitting $501.06 on August 10. MRNA has surged 264.44% this year while its price-to-earnings (P/E ratio) for Q2, 2021 stood at $6.46. Following a stock market decline, MRNA slid 40% from its August high and currently trades at $316.05.
Based in Maryland, US, Novavax is a biotech company focused on developing vaccines to counter serious infectious diseases. Prior to the worldwide breakout of the Covid-19 disease, Novavax has developed experimental vaccines for Ebola, influenza, respiratory syncytial virus (RSV), and several others.
Like several others, Novavax has been working on an experimental jab for the global pandemic. Still, under consideration at the World Health Organisation (WHO), Novavax’s submission is expected to be the first protein subunit Covid-19 vaccine to address the worldwide breakout. Unlike several vaccines that require sub-zero temperatures to maintain their efficacy, Novavax’s shots can be kept at normal refrigerated temperatures (2 to 8 degrees Celsius).
NVAX stock has been largely controlled by the market whims with major rallies and dips. The Maryland company rode into the year on a high, hitting $331.16 before slumping to $156 in early March. A subsequent rally saw it rally to $264.72 the following month before dipping again to $117.86. Continuing its sporadic rise, NVAX surged once more to $278.50 making another descent and finding support at $165.41.
Pfizer is one of the best pharmaceutical stocks in the market right now. With top-performing drugs and medical devices like Epipen, an epinephrine autoinjector; Depo-Provera, birth control injection; Dimetapp, a children’s cough medicine; Pfizer has remained in the forefront of global drug and medical appliances since its founding in 1849.
The company boasts a large repository of blockbuster drugs which generate over $1 billion in annual revenues. This has seen the company increase its dividend payout in the last 10 years. Income-seeking investors have been able to get dividends in excess of 30% in the past five years. Joining the retinue of biotech companies in the Covid-19 fight, Pfizer partnered with BioNTech to produce the Pfizer-BioNTech Covid-19 vaccine which is marketed as Comirnaty.
The drug has been hugely successful following FDA approval for individuals aged 16 and older. A recent CDC approval allows recommends booster shots for individuals aged 18 and above six months after getting their first shot. Pfizer stock has picked up later than other pharmaceutical stocks.
Trading on a $40 average, PFE stock surged to a 52-week high of $51.96 on August 18 where it met with price resistance. A subsequent rally and dip saw PFE retest the $51 mark once again but could not break above the price action. PFE has lost steam for the most part and has slowly slid down to the $40 range. At press time, PFE is trading below the 20-day MA price of $43.90 and trades at $41.93.
West Pharmaceutical is not an out-and-out pharmaceutical company but is primarily focused on the design and manufacturing of injectable pharmaceutical packaging and delivery systems. Headquartered in Pennsylvania, West Pharmaceutical produces rubber components for packaging injectable drugs, thereby providing a sterile environment for the manufacturers of drugs like penicillin and insulin.
With no direct effort in the Covid-19 cure, West Pharmaceutical plays an indirect role in bringing the Wuhan-originated respiratory disease under control. Its rubber stoppers for vials hold injectable medicines and rubber tips for syringe plungers. Given its vital role in the pharmaceutical industry, West has since acquired new equipment in upstate Pennsylvania and North Carolina to double its capacity for products used with Covid-19 vaccines.
West Pharmaceutical has been one of the best-performing pharmaceutical stocks and has traded over the $350 mark for much of the year. WST stock has been on a steady increase and surged to a phenomenal value of $475.69 in September 9. A dip has since seen the WST stock drop to $411.99, reflecting a general market outlook.
Gilead Sciences, Inc. is a biopharmaceutical company headquartered in Foster City, California. Gilead Sciences focuses on researching and developing antiviral drugs used in treating HIV, Hepatitis B & C, influenza, including Harvoni and Sovaldi.
With over 11,800 employees, Gilead Sciences is one of the top biotech companies in the world and recorded a sharp increase in revenue from $22.127 billion to $22.449 in 2019. Following the outbreak of the Covid-19 disease, Gilead Sciences released Velkury also known as remdesivir. Velkury received full approval from the FDA last year and has gone on to gross over $873 million in revenue for the company. This has seen it become the company’s second-best-selling drug in Q3, 2020, behind the HIV drug, Biktravy.
However, a subsequent study published in the Annals of Internal Medicine shows that the Velkury vaccine has few ‘antiviral effects’ on hospitalised Covid-19 patients. This led to the company stopping a phase 3 trial of remdesivir as an intravenous infusion in high-risk non-hospitalized patients. Gilead based its decision on the fast “evolution of the Covid-19 landscape.”
Despite this, Gilead Sciences saw a 21% jump in its product sales year-over-year (YoY) in Q2, 2021. Sales were primarily turbo-charged by Velkury and Biktarvy with both drugs pushing revenue to $6.2 billion compared to the same period last year.
Founded in 1858 by Edward Robinson Squibb, Bristol Myers Squibb (BMY) is an American multinational pharmaceutical company. It manufactures prescription pharmaceuticals and biologics in several key areas, including cancer, HIV/AIDS, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis, and psychiatric disorders.
It is best known for making the blood thinner drug Eliquis. BMY’s cancer drug Opdivo is also a popular feature in US specialist hospitals. Bristol Myers has been expanded and recently acquired drugmaker Celgene in 2019 while adding three more cancer drugs – Revlimid, Pomalyst, and Abraxane to its portfolio.
A popular feature in the Fortune 500 list, Bristol Myers Squibb saw its revenue increase by 63% in 2020. Its dividend payout has remained high with investors getting 29% in the last five years. BMS has been late to the Covid-19 vaccine party but it secured the global rights to a pair of SARS-CoV-2 antibodies discovered by the Rockefeller University. BMY stock has shown periodic rallies and subsequent dips. Hitting a year high of $69.20, BMY has been on a downward spiral and has seen over 10% shaved off its value. At press time, BMY sits precariously at $59.15, below the 20-day MA price of $60.30.
Japan-based pharma giant Otsuka Pharmaceutical Co, Ltd is a subsidiary of Otsuka Holdings Co, Ltd. Founded in 2008, it is the second-largest drugmaker in Japan after Takeda Pharmaceutical Company.
The company is focused on addressing medical needs through the research and development of highly innovative drugs and diagnostics. It focuses on meeting medical needs in central nervous diseases, oncology, cardiovascular and renal areas, tuberculosis, ophthalmology, and neurological disorders.
Aiding the Covid-19 fight, Otsuka partnered with Denka Company in the release of Quick Navi Flu + Covid-19 Ag in Japan. The diagnostic kit is expected to enable medical professionals to easily detect influenza and Covid-19 symptoms in patients. The combo kit will be able to achieve these results within a 15-minute assessment window.
Teva Pharmaceuticals is a top Israeli pharmaceutical company headquartered in Petah Tikva, Israel. Founded in 1901, Teva Pharmaceuticals is focused on the genetic drugs industry and was once the largest generic drug manufacturer in the world before losing the spot to Pfizer in 2020. It is the overall eighteenth largest pharmaceutical company in the world and has operational facilities in Europe, Australia, North and South America.
Despite its intentions to partner with other biotech companies in manufacturing a vaccine for the global pandemic, Teva Pharmaceuticals has not been able to secure any partnership so far. According to CEO Kare Schultz, the company’s offer has not been taken up and there is a slim likelihood that the healthcare giant will be working on a cure. Meanwhile, Teva has $10.6 billion assets under management (AUM) and a dividend yield of 3.49%.
TEVA stock started the year on a high but has since tapered off. Breaking above the $13.04 range on February 10, TEVA has since been on a downward trend with momentary rallies. Following its non-participatory role in the Covid fight, TEVA stock hit a yearly low of $8.26 on July 19. A brief jump saw it surge to $10.30 before trading sideways for much of July. However, TEVA has shown resilience and is trading above the 20-day MA price of $9.28. It currently stands at $9.82 with a more uptrend projected.
Now that you have a general overview of the top ten best pharmaceutical stocks to buy this month, we will explore the best platforms to buy these shares. To curate our list, our research focused on platforms that allow you to trade pharmaceutical companies’ stocks. We also considered the broker’s fees, commission, user-friendliness, security, and the accepted payment methods.
Founded in 2007, eToro is a popular social trading platform that is highly intuitive, safe, and cost-effective. As such, you get to enjoy commission-free trades. Also, monthly and annual charges are scrapped giving you more purchasing power.
eToro’s popularity has seen it garnered over 20 million global users from 140 countries due to its large repository of investment services. Top pharmaceutical stocks to buy are available on the eToro platform with their accompanying exchange-traded funds (ETFs).
Alongside this, eToro offers exposure to over17 global financial markets, commodities, FX currency trading, cryptocurrencies, stocks, and bonds. Its CopyTrade feature enables less-experienced traders to copy trading moves of professionals. Added to this is the CopyPortfolio which is the platform’s in-house managed portfolio. CopyPortfolio helps traders diversify their investments into several regions and sectors automatically. This portfolio is often rebalanced based on the best-performing sector at the moment.
eToro also supports a plethora of payment methods and you can buy your best pharmaceutical stocks through bank wire transfer, credit or debit card, e-wallet channels like PayPal, Skrill, Neteller, and several others. The minimum deposit is pegged at $50 (for US residents) while other regions have to pay $200 to get started.
In the aspect of security, eToro is a regulated broker with operational licenses from the UK’s FCA, ASIC, CySEC, and FINRA. Users can also lay claims to over £85,000 in lost funds in the event of bankruptcy as it is supervised by the UK’s FSCS. Aside from a 0.5% conversion fee and a $5 withdrawal fee, eToro does not charge any more fees in using its platform.
67% of retail investor accounts lose money when trading CFDs with this provider.
The pharmaceutical sector has been hard-pressed in the past year to come up with a solution for the global pandemic. With this, all biotech companies have focused their attention on finding a cure while paying less attention to other areas. This has seen their performance drop in relation to the financial market where Amazon stock or Apple dominates. The iShares Biotechnology ETF (IBB) posted a total return of 27% compared to the Russell 1000’s total return of 35.1% as of September 16.
However, many pharma companies pay attractive dividends and this can be ideal for you if you are a long-term investor. The long period will not directly impact you as you can leave your investment to grow over the years. With the world not yet out of the woods with the Covid situation, biotech companies will continue to be relevant for some time and the sector will see significant investments in the coming years.
Another key reason to consider diversifying your portfolio is that the world’s population is rapidly aging. With more lifespan expectancy, many more people are going to rely on prescription medications in the coming years.
Pharmaceutical stocks have become a popular choice for investors as the world grapples with the impact of the Coronavirus. Given the key roles and players in the industry, many see this period as the golden age for the biotech sector.
Several attempts have been made by different pharma companies to proffer a solution but there has not been a perfect fit yet and this ultimately leaves room for the best to flourish. If any biotech company is able to address issues surrounding manufacturing processes, logistics, and predominantly efficacy, the pharmaceutical company would likely see an explosion in value.
However, compared to the general financial markets, pharmaceutical stocks have been slow off the bat. This has affected the sector’s yearly returns. Meanwhile, the growing belief and collaboration on finding a cure have slightly enabled the value of pharmaceutical stocks to jump 0.26% on the Dow Jones US Pharmaceutical Index with the stock closing at $708.30. The Index has grown 8.07% year-to-date (YTD) compared to other sectors and its one-year gain is pegged at 16.18%.
The S&P Pharmaceuticals Select Industry Index puts the yearly returns on investment at 3.34%. However, this figure is expected to change soon. According to a report by Grand View Research, the global biotech market is expected to surge at a compound annual growth rate of 15% over the next seven years to $2.44 trillion.
Penny stocks are stocks of small, struggling companies underperforming in the market. However, this year has seen penny stocks become media darlings following the concerted efforts of retail investors. The pharmaceutical sector has not been escaped this phenomenon and we list a few best pharmaceutical under $5 you can add to your portfolio:
Making a decision on the best pharmaceutical stocks to add to your portfolio can be difficult. Below, we highlight a few criteria to help you get started.
The first place to look at is the company’s financial track record over a period of time. A company may look financially okay on the outside and may be taking on massive debts. This should be a major red flag if you cannot find a means for settling those credit obligations. A look at the price-to-earnings (P/E ratio) would provide insights to decide if the stock is trading at a discount or at a premium.
Your underlying reason behind your investment will help you decide in this case. If you are driven by a company’s growth or the dividends will immediately help you choose the best pharmaceutical stocks for you. If you want growth, penny pharmaceutical stocks might be the best route, while a dividend-focused investment strategy will see you go for the likes of BioNTech and JNJ.
Now that you are ready to buy pharmaceutical stocks, we will walk you through the process of doing this on the eToro platform. The following steps will take about 10 minutes to complete.
Navigate to the eToro website and click on ‘Join Now’ to access the signup page. While there, you will need to provide your first and last name, email address, and phone number. You will also need to choose a strong password.
eToro is a regulated broker which means you will be required to upload a number of documents as part of the platform’s know-your-customer (KYC) policies. This can be done online by taking a screenshot of your government-issued ID card or driver’s license. You will also need to upload a proof of address which can be covered by your recent utility bill or bank statement.
You will need to meet the minimum deposit bar to access the best pharmaceutical stocks on eToro. The broker supports:
Once the deposit is complete, you are now ready to buy your preferred pharmaceutical stocks. eToro makes this process easy. All you need to do is type into the search bar what you want to buy. Another option will be to click on the ‘Trade Markets’ button, and select ‘Stocks.’
Then click on the ‘Industry’ button and select ‘Healthcare.’ You will be shown a complete list of the stocks in that sector. For learning purposes, we would buy JNJ stock- the largest pharmaceutical company in the world – so we click on ‘JNJ’ and select the ‘Trade’ button.
You can now buy your stock. Simply enter the amount you are willing to invest ($25 minimum) and confirm your trade. Remember to set your stop loss and take profit before closing the purchase page.
Pharmaceutical companies are plentiful and the more recognised brands have led the biotech sector for several years. Given this, investors are more familiar with bigwigs. Looking at the risk to return ratio and the pivotal position the world is in, pharmaceutical companies are still expected to grow in the coming years. The set of highlighted firms we have covered could provide the needed financial boosts that you want.
If you’re searching for pharmaceutical stocks to buy, we recommend using the eToro platform due to its zero-commission fees, user-friendly platform, and multiple payment methods.
Yes. There are several platforms that offer investment services covering pharmaceutical companies. We recommend using eToro for super-low fees, zero commissions, and a user-friendly interface.
This is largely your decision. However, we recommend that you do due diligence and research before making any investment decision.
Following the increasing role pharmaceutical companies play in the fight against Covid, investing in the sector could yield massive returns.
The best pharmaceutical stocks to buy at the moment are JNJ, BioNTech, Moderna, and several others we listed in this guide.
The January 2021 financial disclosure by former President Donald Trump does not state any stock holdings in pharmaceutical companies as most of his investments are in the real estate sector.
Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.
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