February 12, 2007
Money troubles can sometimes ruin a good relationship. However, if you choose pharmaceutical stocks like Johnson and Johnson (NYSE: JNJ ) or GlaxoSmithKline (NYSE: GSK ) as your significant investing others, you'll get companies that steadily grow their top-line results, even when the economy is in a recession.
It would be great if people only got sick when the economy was booming, but illness pays the business cycle no mind. While other sectors of the stock market, like transportation or tech stocks, may be sinking during a recession, large-cap pharmaceutical and biotech stocks are much more recession-proof, since their demand and earnings fluctuate far less.
I'm not just in love with pharmaceutical and biotech stocks for their independence. Where else besides the technology industry will you find stocks like Amgen (Nasdaq: AMGN ) or ImClone Systems (Nasdaq: IMCL ) that can be 50-baggers in less than 20 years?
Small development-stage drug stocks are not for the faint of heart. If you can't possibly stand losing 75% or more on your shares in one day, stay clear. But some of these companies' larger blue-chip brethren have a place in almost any portfolio. Even investors with an income- or value-oriented bent will find many drug stocks suitable for consumption, given some of the larger firms' juicy 3%-plus annual dividend yields. No matter how you like to invest, or what your macroeconomic outlook may be, there's always a drug stock that will be a good match for you. That's why all investors should leave a special place in their heart for drug stocks on Valentine's Day.
What's sending Fools' hearts aflutter? Go back to our intro page to see what else we have a crush on.
GlaxoSmithKline and Johnson & Johnson are Income Investor recommendations. Discover our full lineup of dynamic dividend-paying stocks with a free 30-day trial subscription.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.