Could medical stocks provide the best medicine for your portfolio? To be certain, quite a few prominent names have posted amazing gains and racked up the dividends over 2017.
But others continue to search for a pulse or that next blockbuster drug that provides a welcome shot of shareholder steroids. Either way, factors from an aging population to corporate mergers and acquisitions could have a major impact on the sector in 2018. High tech and artificial intelligence promise to hasten change; health care reform (or the prospect of it) will still make waves; price transparency will shake some corners of the market.
[See: 7 of the Best Health Care Stocks to Buy for 2018.]
While no one has the magic pill for investor happiness, these eight medical stocks still warrant a place in your portfolio’s end-of-year checkup.
Eli Lilly & Co. (LLY). It’s Big Pharma meets big headaches for Eli Lilly, which gave some shareholders nausea in 2017. Since last December, the share price for this Indianapolis-based company has jumped 18 percent to about $86.50. Still, that action came before mid-March, and LLY has remained flat overall since July 2015; in the preceding three years, it had soared more than 80 percent. September brought the bad news that Eli Lilly will cut 3,500 positions in 2018 as the company struggles to develop two major drugs.
Johnson & Johnson (JNJ). Call it building a bridge of Band-Aids to the stars. JNJ boasts uninterrupted growth over the short term (up 22 percent in 2017) and long haul (103 percent since 2012). The central New Jersey company is also known as a ” dividend aristocrat,” with 2017 capping yet another year of rising dividends in a winning streak that goes back more than 50 years. To put that in recent perspective, the 2007 total dividend of $1.62 hit $3.32 this year.
Gilead Sciences (GILD). If you owned Gilead shares on June 19, 2015, you were sitting on top of the heap — literally. That day, the hepatitis C treatment leader hit an all-time high, pennies shy of $120. Then came a biopharma bellyflop, as GILD went down, down, down by more than a third to its present price of $75.50. It’s a shocker, given that Gilead skyrocketed more than 440 percent between late 2011 — when Gilead acquired Pharmasset for $11 billion — and 2014.
Boston Scientific Corp. (BSX). The last week of November wasn’t kind to BSX, as the stock tumbled 13 percent after the company delayed commercialization of its Lotus Edge aortic valve system. But take heart: Some analyst firms, including JPMorgan, see the drop as a buying opportunity. And earlier this month the Food and Drug Administration approved Vercise, the company’s deep brain stimulation system, to treat symptoms of Parkinson’s disease. Vercise has a battery life of 15-plus years, more than enough time for BSX to regain investor confidence.
[See: 11 Health Care Stocks for a Regular Dose of Income.]
Medtronic (MDT). Despite losing ground since July, this Dublin, Ireland-based medical technology and device company has gained 18 percent for the year and doubled over the past five years to its current share price of $83.50. That may explain in part why 11 out of 20 analyst firms recommend MDT as a “strong buy” (though eight others call it a “hold”). Christmas came early for shareholders, as the company announced a 46 cents-per-share dividend in early December, up 7 percent over 2016.
Pfizer (PFE). Pfizer has lost patent protections on Viagra and other cash cows, including Celebrex, Zyvox, Lyrica and Lipitor. But PFE is up 11 percent this year to $37 as newer products pick up the slack. The blockbuster breast cancer drug Ibrance has been prescribed more than 90,000 times since winning FDA approval in 2015 — and before discounts or health insurance, costs patients $9,850 a month or $118,200 per year.
Teva Pharmaceutical Industries (TEVA). For the Israel-based Teva, it’s troubled times. One of four workers are slated to lose their jobs; meanwhile, the company has suspended its dividend and has $5 billion in principal payments due in 2018. TEVA cratered the first week of August, dropping 40-plus percent following a series of quarterly misses. But it hopes to recover footing under new CEO Kare Schultz by launching generic versions of the Gilead Sciences HIV and hepatitis B drug Viread, and Pfizer’s Viagra.
[See: 10 Ways to Invest in Pharmaceuticals With ETFs.]
Bristol-Myers Squibb Co. (BMY). For three dark months in 2016, BMY stock lost a third of its value as its oncology drug Opdivo flunked trials for treating advanced non-small-cell lung cancer. But since that October 2016 trough, BMY has jumped 25 percent and is up 5 percent this year to $62. Meanwhile, Opdivo has shown new promise in tandem with another drug, Yervoy, in treating renal cell cancer. If that combination wins FDA approval, it could create a huge earnings bump for BMY.
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8 Medical Stocks Get a Year-End Checkup originally appeared on usnews.com
