Despite the prevalence of get-rich-quick schemes, those looking to grow their capital need not reinvent the wheel. Investing in stocks remains one of the best ways to do that. But not all securities are created equal. With an unlimited number of investment options on the market, picking the wrong ones could mean waving goodbye to your hard-earned money.
Investing in shares of great companies is the key to achieving your financial goals. With that in mind, here are three excellent stocks that should make you richer over the long-run if you buy today: Bristol Myers Squibb (NYSE:BMY), Veeva Systems (NYSE:VEEV), and Eli Lilly (NYSE:LLY). Here's why each of these companies deserves a place in your portfolio.
1. Bristol Myers Squibb
Pharma giant Bristol Myers has a strong lineup of medicines, a rich pipeline, and a juicy dividend, all of which can help drive revenue and earnings higher while rewarding investors with dividend increases.
The company boasts at least eight blockbuster drugs, including multiple myeloma treatment Revlimid, which saw sales in the third quarter of 2020 jump by 10% year over year to $3 billion. Bristol Myers got its hands on Revlimid thanks to its 2019 acquisition of Celgene in a cash and stock transaction valued at $74 billion.The deal bolstered the company's lineup with other products like Pomalyst, another multiple myeloma drug. During the third quarter, sales of Pomalyst increased by 17% year over year to $777 million. Bristol Myers also markets anticoagulant Eliquis, which brought in revenue during the third quarter of $2.1 billion, a 9% increase from the year-ago period.
Turning to Bristol Myers' pipeline, the company has more than four dozen clinical compounds in development and at least as many ongoing clinical trials, including a raft of phase 3 studies. Newly approved products (or new indications for existing products) are likely to boost the drugmaker's financial results in the coming years.
Despite its stock underperforming the broader market of late, Bristol Myers' prospects look enticing. The company's revenue and earnings are set to keep growing at a good clip. Three of its drugs, Revlimid, Eliquis, and Opdivo will be among the five best-selling drugs in the world in 2024, according to research firm Evaluate Pharma.
Bristol Myers also closed its latest acquisition in November: a clinical-stage biopharmaceutical company called MyoKardia in an all-cash transaction worth $13.1 billion. MyoKardia's leading pipeline candidate is mavacamten, a potential treatment for a chronic heart disease called obstructive hypertrophic cardiomyopathy. Management believes "mavacamten has multibillion-dollar potential," and it could be yet another long-term growth driver.
Lastly, with a dividend yield of 2.80% (compared to a 1.55% yield for the S&P 500) and a low cash payout ratio of 31.8%, investors can count on Bristol Myers to continue increasing its dividends. All these factors make this pharma stock an excellent pick for 2021 and beyond.
Image source: Getty Images.
2. Veeva Systems
Veeva Systems' mission is to help companies in different sectors, including the life sciences industry, bring their products to the market faster and more efficiently while ensuring regulatory compliance. The company works with many of the top players in the pharmaceutical and biotech sectors, including AstraZeneca, Merck, and Vertex Pharmaceuticals. Veeva's founder and CEO Peter Gassner is a former executive of the cloud-based software giant salesforce.com. Veeva Systems and Salesforce have a long-standing partnership that allows the former to utilize Salesforce's platform to run its cloud-based services.
Veeva's list of products includes Veeva Vault, which helps drugmakers sail through the complex process of clinical trials. The company's largest segment by revenue is subscription services. During the first nine months of its fiscal year 2021, which ended on Oct. 31, Veeva Systems reported $1.07 billion in revenue, representing a 34.8% year-over-year increase. The company's subscription services revenue accounted for about 80% of its total revenue.
Veeva has an excellent retention rate for its services. For its 2017, 2018, and 2019 years, its retention rate was 127%, 121%, and 122%, respectively. On top of that, the company is developing newer products to better assist its clientele. Veeva Systems has branched out beyond the life sciences industry and into other regulated ones, namely, consumer packaged goods (CPG), chemicals, and cosmetics.
The company's vision for these sectors is the same as it is in the life sciences industry. During the first three quarters of its fiscal year 2021, Veeva Systems generated about $30 million in revenue from these spaces, which represented nearly 8% of its total revenue.
It also has more than 60 customers from these three sectors, and the company sees a growing opportunity, especially given the changing environment of the CPG, chemical, and cosmetics industries brought about by the pandemic. Veeva Systems looks to be on a solid path to consistent revenue and earnings growth for the foreseeable future, and its stock price should continue to climb too.
3. Eli Lilly
Eli Lilly is another pharma giant with a rich suite of drugs. Some of the company's top sellers include Trulicity, a diabetes medicine that had sales of $3.6 billion for the first nine months of 2020, a 22% jump. Other top performers include insulin product Basaglar and oral diabetes drug Jardiance. For the first nine months of 2020, revenue from the former rose by 5% to $842.3 million, while sales of Jardiance increased by 24% year over year to $840.3 million.
Lilly also has well over three dozen ongoing clinical trials. One of the company's pipeline candidates is a potential drug for Alzheimer's disease called donanemab. The company recently reported positive results from a phase 2 clinical trial for it.There are more than 5 million Alzheimer's patients in the U.S., and there are no approved drugs that can treat the cognitive declines associated with it. While there is still a long road ahead for donanemab, investors would do well to monitor its progress.
It is worth noting that Biogen's aducanumab is currently being reviewed by the Food and Drug Administration (FDA) for this indication. Both aducanumab and donanemab look to treat the disease by removing amyloid-beta plaques from patients' brains, which some professionals believe could help those who suffer from Alzheimer's. But considering that an advisory panel of experts strongly recommended the FDA not approve the drug, Biogen's prospects look unfavorable.
Eli Lilly recently beefed up its pipeline with its planned acquisition of Prevail Therapeutics, a biotech that focuses on developing gene therapies, in a cash transaction valued at around $880 million. Lilly already had a lot going for it, and this move only made its long-term prospects even more appealing thanks to potential drugs that target Parkinson's disease and dementia, conditions for which there are no standard treatments. In short, adding shares of this pharma giant to your portfolio would be a great move for your money.
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January 24, 2021 at 06:45PM
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3 Top Healthcare Stocks That Can Make You Richer in 2021 (and Beyond) - Motley Fool
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