Coronavirus vaccines are coming, or at least the odds are getting better every day that they are.
Investors who want to potentially benefit from the launch of coronavirus vaccines have many options to choose from. However, the number of low-risk leaders competing are few. Here are three coronavirus vaccine stocks that are relatively safe bets right now.
You may be wondering why AstraZeneca (NYSE: AZN) is the first on the list. After all, the large drug manufacturer temporarily suspended late-stage testing of the COVID-19 vaccine candidate AZD1222 after a clinical trial participant experienced an unexplained disease. Even with this setback, however, AstraZeneca appears to be a great title to buy when looking at the big picture.
First of all, it seems likely that AZD1222 will be back on track soon. Phase 3 testing of the experimental vaccine has already resumed in the UK. AstraZeneca CEO Pascal Soriot expects the company to still be able to announce the interim results of the study by the end of this year.
The main reasons to buy AstraZeneca, however, are its strong current product range and promising pipeline. AstraZeneca’s cancer drugs notably enjoy tremendous momentum, with three blockbusters delivering year-over-year growth of 45% or more in the first half of 2020. The drug maker also has a pipeline full of potential winners, including nine new candidates in late stage testing.
Unsurprisingly, Wall Street analysts expect AstraZeneca to generate average annual earnings growth of 19% over the next five years. Investors should also appreciate the pharmaceutical company’s solid dividend, which currently produces over 2.5%.
Bill Gates thinks Pfizer (NYSE: PFE) is the undisputed leader in the coronavirus vaccine race. He is probably right. The large pharmaceutical company and its partner, German biotechnology BioNTech (NASDAQ: BNTX), appear to be on track to report late stage results for their COVID-19 vaccine candidate BNT162b2 ahead of other rivals.
If Pfizer and BioNTech obtain clearance for emergency use from the Food and Drug Administration, they will receive $ 1.95 billion from the US government to provide 100 million doses of BNT162b2. That deal could be expanded to include another 400 million doses. In addition, the two companies have important supply agreements with Canada and Japan and are negotiating an agreement with the European Commission.
Pfizer’s growth should soon get a nice boost regardless of what happens with BNT162b2, though. The company hopes to close a merger of its Upjohn unit with Mylan (NASDAQ: MYL) in the fourth quarter. This transaction would sell Pfizer’s old drugs that have lost patent exclusivity. It would leave Pfizer with a solid lineup of winners such as Eliquis blood thinner and rare disease drug Vyndaqel, as well as a pipeline of 90 clinical programs, including four pending regulatory approval and 23 in late stage testing.
Investors who choose to keep their shares in the new entity created by the Upjohn-Mylan (Viatris) merger will receive a combined dividend from Pfizer and Viatris that is roughly the same as what the “old” Pfizer paid. Pfizer’s dividend yield is currently 4.1%. But investors who choose to sell their stake in Viatris will still enjoy an attractive dividend.
3. Johnson & Johnson
Johnson & Johnson ‘S(NYSE: JNJ) lags behind AstraZeneca and Pfizer with its coronavirus vaccination program. However, the healthcare giant plans to begin late-stage clinical trials on Ad26.COV2.S this month.
Don’t underestimate J & J’s prospects in the COVID-19 vaccine race. The company could have a big advantage: While rival vaccines require two doses, Ad26.COV2.S could be effective with just one dose.
Of course, sales generated by a successful coronavirus vaccine would still be a drop in price for Johnson & Johnson. The company made over $ 82 billion in revenue last year. It is a leader in consumer health, medical devices and pharmaceuticals. J&J’s financial position allows it to invest in research, development and acquisitions to ensure it stays on top.
Like AstraZeneca and Pfizer, Johnson & Johnson offers a strong dividend (currently 2.7% yield). Even better, J&J is a Dividend Aristocrat with an impressive track record of 58 consecutive years of dividend increases.