After what's felt like a decade rolled into one year, it's hard to believe that at last we're in the final stretch of 2020. If you're looking to finish out the year strong with some winning stock buys, you've come to the right place.
Plucked from the healthcare, financial services, and tech sectors, each of the following stocks has had a different story to tell this year. For the most part, all of these companies have managed to emulate or outperform the S&P 500 following its March recovery and avoid the extreme headwinds that have crippled other popular stocks. Let's take a closer look.
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Alexion Pharmaceuticals
Alexion Pharmaceuticals (ALXN) is a biopharmaceutical company that focuses on a very specialized niche of the healthcare field -- the treatment of rare diseases and disorders. It currently has five approved medicines on the market -- Andexxa, Kanuma, Soliris, Ultomiris, and Strensiq -- for the treatment of various rare diseases. The company is also studying Ultomiris, which is a monoclonal antibody drug, in a late-stage randomized controlled trial as a potential coronavirus treatment for some individuals who have acute respiratory syndrome.
Alexion reported stellar financial results during the first three quarters of 2020, with year-over-year revenue growth of 27%, 20%, and 26%. Ultomiris, Soliris, and Strensiq are the three most profitable products in Alexion's portfolio. Sales of these drugs were up 222%, 5%, and 23%, respectively, on a year-over-year basis during the third quarter ending Sept. 30. The company expects to report between $5.9 billion and $6 billion in revenue for all of 2020.
Alexion's target market isn't as wide as that of other healthcare companies, and its portfolio is still relatively small. But the products it does have on the market are fueling astounding earnings growth. Alexion also has a highly promising research and development pipeline with more than a dozen clinical trials in progress at the time of this writing. These trials encompass new treatment candidates in areas such as hematology and neurology, as well as new indications for Andexxa, Soliris, and Ultomiris. If you're looking to add a high-growth, large-cap stock to your portfolio, Alexion Pharmaceuticals should definitely be on your radar.
Mastercard
Although household name Mastercard (MA 0.07%) has naturally suffered from the economic impact of COVID-19, there's no reason the financial services company can't recover to its pre-pandemic growth numbers over the next few years. In 2018 and 2019, the company reported year-over-year revenue growth figures of 20% and 13%, respectively. But while Mastercard's revenue was up 3% year over year in the first quarter of 2020, its earnings slumped 19% in the second quarter and 14% in the third, with much of the decline attributed to a decline in travel spending.
However, a glimmer of hope for post-pandemic recovery appeared in the company's Q3 earnings report. Management said that purchase volume was up 2% during the three-month period ending Sept. 30, while gross dollar volume increased by 1%. This is a sign that people are starting to spend again as hopes of an imminent vaccine are on the rise, which could help the U.S. avoid a second, prolonged lockdown. Although modest, Mastercard's 0.5% dividend yield looks safe for now, which is good news considering other companies have had to cut or suspend dividends due to the pandemic. The company paid out $402 million in dividends to shareholders during the the third quarter, and closed the period with $10.2 billion cash on its balance sheet.
Netflix
It's been a record-breaking year for investors' favorite streaming stock. With so many people stuck at home and thousands upon thousands of streaming selections to pick from, it's not surprising that Netflix (NFLX -8.00%) has been one of the coronavirus stock market's top performers.
During the first six months of the year, the tech stock added 26 million paid subscribers to its platform, a considerable spike from the 12 million new subscriptions it registered in the first half of 2019. In the second-quarter report released on July 16, management warned investors that these unprecedented growth numbers would likely slow during the second half of 2020. They were right.
In the third quarter (ended Sept. 30), Netflix onboarded 2.2 million new subscribers, less than half of the 6.8 million it recorded during the same period last year. Even so, Netflix still acquired more paid memberships during the first three quarters of 2020 than it did for the whole of 2019. Third-quarter revenue also surpassed management's expectations and was up 23% year over year, leaving the company with a solid 20% operating margin. Netflix continues to rely heavily on original films and local-language content in its slate of productions, expecting to acquire 6 million new paid subscribers during the final quarter of the year.
Analysts forecast that Netflix will grow its earnings by more than 40% per year over the next five years alone. Even when the stay-at-home trend slows down -- and we could still be months out from seeing the beginning of a return to normality -- Netflix is easily a stock you can buy and hold forever.
