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3 COVID Vaccine Stocks to Invest in for the Long Run

By Keith Speights - Dec 4, 2020 at 6:11AM

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These aren't just temporary sensations.

Everyone looks forward to the end of the pandemic. But even when that day comes, it won't mean the end of the novel coronavirus. The vaccines that we hope will bring an end to the COVID-19 pandemic will likely remain a part of life for years to come.

Some of the stocks that have skyrocketed during the rush to fight COVID-19 might not fare as well once the battle is largely won. Others, though, have what it takes to hold up both during and after the pandemic. Here are three COVID vaccine stocks you can invest in for the long run.

Hand holding an hourglass with images of lighted dollar signs surrounding it

Image source: Getty Images.

1. Johnson & Johnson

Johnson & Johnson ( JNJ -1.09% ) lags a little behind the front runners in the COVID-vaccine race. However, the healthcare giant should announce interim results from its late-stage study of experimental coronavirus vaccine JNJ--78436735 early next year. 

The wait could well be worth it. J&J's vaccine requires only one dose, compared to two doses for the other top COVID-vaccine candidates. That could give the company a major competitive advantage once the pandemic is over and governments across the world are more cost-conscious. Because of this, J&J is arguably the most likely COVID vaccine maker to blow past the current leaders.

Although Johnson & Johnson has committed to providing its coronavirus vaccine at cost during the pandemic, profits will be on the table once the pandemic is over. The company hasn't been a major player in the vaccine market in the past, but that could change once J&J tastes success for its COVID vaccine.

Of course, J&J is very successful even without a coronavirus vaccine. The company runs multibillion-dollar businesses spanning the healthcare sector, from consumer health products to medical devices to pharmaceuticals. It's navigated the changing landscape in healthcare for over 130 years. If there's a textbook example of a company built for long-term success, J&J is it. 

2. Pfizer

Pfizer ( PFE 1.87% ), along with its partner BioNTech ( BNTX -6.35% ), holds the distinction of being the first to win authorization for a COVID vaccine, as the U.K. gave a green light to BNT162b2 on Wednesday. It seems likely that the big drugmaker will also become the first to secure U.S. emergency use authorization (EUA) for a coronavirus vaccine later this month.

Could the ultracold storage requirements for BNT162b2 be a competitive issue for Pfizer once the pandemic is over? Maybe. However, the company is developing a powder formulation of the vaccine that wouldn't require freezing. This second-generation COVID vaccine could be available next year.

It's clear that Pfizer is playing to win over the long run in the global COVID-vaccine market. The company is also working with BioNTech to develop a flu vaccine based on the same messenger RNA (mRNA) technology used in BNT162b2. Although Pfizer hasn't stated any plans to develop a combo COVID/flu vaccine, it wouldn't be surprising if such an effort is on the radar screen.

Like J&J, though, Pfizer provides investors plenty of other reasons to like the stock in a post-pandemic world. Pfizer's recent merger of its Upjohn unit with Mylan to form a new entity Viatris paves the way for much better growth in the coming years. With a strong dividend thrown into the mix, Pfizer could deliver market-beating total returns over the next decade.

3. Moderna

Moderna ( MRNA -7.06% ) is running right behind Pfizer and BioNTech. The biotech has filed for U.S. EUA and European approval for its coronavirus-vaccine candidate mRNA-1273. Moderna's mRNA vaccine could be the second on the market.

The interim efficacy results for mRNA-1273 were only slightly below those of BNT162b2, close enough to basically be a tie. However, Moderna figured out how to resolve the ultracold storage requirements. That could give it an advantage, at least over the near term.

Moderna's valuation has skyrocketed during the race to develop coronavirus vaccines. The biotech stock is up more than 660% year to date. Don't assume, though, that Moderna is a bubble waiting to pop once the pandemic ends.

The company believes that its mRNA technology could work with lots of diseases. Moderna already plans to advance another mRNA vaccine candidate targeting cytomegalovirus (CMV) into late-stage testing next year. It also has another 11 mRNA programs in clinical studies.

With a huge influx of cash likely on the way, Moderna will be able to greatly expand its clinical development. This could set the stage for the biotech's mRNA platform to make Moderna a much bigger company in the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Moderna, Inc. Stock Quote
Moderna, Inc.
$342.49 (-7.06%) $-26.02
Pfizer Inc. Stock Quote
Pfizer Inc.
$53.38 (1.87%) $0.98
Johnson & Johnson Stock Quote
Johnson & Johnson
$158.00 (-1.09%) $-1.75
BioNTech SE Stock Quote
BioNTech SE
$339.50 (-6.35%) $-23.02
Viatris Inc. Stock Quote
Viatris Inc.
$12.38 (-1.08%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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