The pharmaceutical sector is composed of companies that research, develop, manufacture, and sell pharmaceuticals and therapies used to treat or eradicate diseases, including vaccines. Pfizer Inc. (PFE), AbbVie Inc. (ABBV), and Merck & Co. Inc. (MRK), are among the largest and best- known firms in the world. Following permission from the US and international governments for vaccinations to prevent the COVID-19 virus, a number of pharmaceutical companies, notably Pfizer, have witnessed a rise in sales.
Pharmaceutical companies, as measured by the iShares U.S. Pharmaceuticals ETF (IHE), have fallen behind the general market over the previous 12 months. IHE had a total return of 29.7% throughout that time period, compared to 48.3% for the Russell 1000.
Investors in pharmaceutical shares in the UK seek growth and profit potential, and frequently choose high-yield companies since they are more likely to provide steady dividends. Dividends to investors can help in building loyalty and trust in the company's performance and future payouts.
Healthcare stock performance may also be gauged by total return. It depicts an investment's return rate over time, as measured by interest, capital gains, and dividend data. All of these factors may be considered to determine the worth of top pharmaceutical stocks.
Below are our 5 top picks for the best pharmaceutical stocks to consider for 2023:
5 Top Big Pharma Stocks To Invest In For 2023
1. Johnson & Johnson
The revenue and earnings of Johnson & Johnson did not experience much change from in the last several years. The sales of Remicade and other baby care products, saw a drop in sales. However, J&J's other products, such as Stelara, Tremfya, and Darzalex, a popular prostate cancer medication, are expected to fuel future growth.
There are roughly 40 late-stage initiatives within the organization. Amivantamab, a cancer medicine, and ponesimod, a multiple sclerosis medication, are two of the most promising prospects.
J&J also completed an effective COVID-19 vaccine candidate and is still increasing production capacity while its efficacy data has improved versus new Coronavirus strains. It has experienced some hiccups along the road and so far has come in 3rd place in the North America vaccine race compared to Moderna and Pfizer.
J&J is a Dividend Aristocrat, with a dividend increase of approximately 35% in the previous five years.
2. AbbVie (ABBV)
Two years ago, AbbVie's annual revenue climbed by less than 2%, but profit rose by 39%. Humira, the company's best-selling blockbuster medicine (blockbusters are medications with annual sales of at least $1 billion), has lost patent exclusivity in Europe, putting pressure on sales. AbbVie's portfolio, on the other hand, contains many fast-growing medicines, including cancer medicines Imbruvica and Venclexta, as well as anti-inflammatory medicines Rinvoq and Skyrizi.
Over 20 products in phase 3 clinical trials are in the drugmaker's pipeline. The majority of AbbVie's initiatives are aimed at gaining further approvals for current medications, but the company also has intriguing late-stage prospects for migraine, myelofibrosis, and Parkinson's disease.
AbbVie has a 49-year dividend rise streak, making it a member of the Dividend Aristocrats, a select group of S&P 500 index firms that have hiked their dividends for at least 25 years. Over the previous five years, the firm has grown its dividend by 128%.
3. Pfizer (PFE)
Pfizer, based in New York City, is one of the world's major pharmaceutical companies. Pfizer, which was established in 1849, has been a part of the Dow Jones Industrial Average stock index since 2004 (although removed around mid 2020 for a newer company), providing a benchmark for rising pharmaceutical firms. Pfizer is a pharmaceutical company that develops and sells medications and vaccines for inflammatory and immunologic illnesses, as well as uncommon illnesses, all over the world.
This blue-chip stock pays out steady dividends and offers growth and revenue prospects, making it one of the most favored biotech companies among investors. The Pfizer-BioNTech vaccine, which has been demonstrated to be 95 percent effective against Covid-19, was the first to be licensed for distribution in the UK in December 2020. It has been one of the most successful vaccines so far worldwide, with positive new data released monthly in 2023.
4. Moderna (MRNA)
For investors interested in growing pharma stocks, investing in Moderna stocks is another option on this list. Moderna is a biotech firm based in the United States that focuses on mRNA molecules for vaccines and medicines development. The firm has already formed agreements with other prominent pharmaceutical firms like AstraZeneca and Merck, indicating its bright future in the healthcare industry. In January 2021, Moderna's vaccine became the third to be authorized for wide distribution in the United Kingdom, establishing this small-cap company as a major challenger to its large-cap rivals.
5. Novavax (NVAX)
Novavax is an autoimmune disease vaccine company based in the United States. Novavax is a small-cap pharma company with a newer and hence lower position in the healthcare business than the blue-chip firms on this list. Despite the fact that it does not pay dividends, it has shown rapid progress in clinical testing for the Covid-19 vaccine, causing the company's worth and Novavax's stock price to grow by more than double since the beginning of 2020. It's initial Coronavirus vaccine study data shows over 90% efficacy currently in mid 2021. It is much higher now in 2023.
Other Top Big Pharma Stocks To Invest In For 2023
In addition, leading pharmaceutical stocks to consider investing in include Eli Lilly, Bayer, Viatris, and Organon. All of these top pharma stocks pay dividends as well for some extra income generation. A dividend can help as an extra bonus or insurance policy that can be counted on against the volatility of pharma stocks.
Smart Stocks
The pharmaceutical industry is growing in leaps and bounds. Stock up on these smart stocks for your portfolio for 2023!
