Please ensure Javascript is enabled for purposes of website accessibility

This Company May Be the Next to Cross the Coronavirus Vaccine Finish Line

By Adria Cimino - Jan 28, 2021 at 12:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Stay tuned for phase 3 results in the coming days.

The U.S. Food and Drug Administration soon may grant Emergency Use Authorization to a big pharma company's investigational coronavirus vaccine. And the company doesn't immediately plan to take a profit on sales. In this Motley Fool Live video recorded on Jan. 22, 2021, Healthcare and Cannabis Bureau Chief Corinne Cardina and contributor Adria Cimino discuss why you may want to buy shares of this company -- but not for its position in the vaccine race.

Corinne Cardina: Let's talk about a company that has said it does not plan to profit from its vaccine during the pandemic, and that is Johnson & Johnson (JNJ 1.75%). It's going to, once it receives, if and when it receives regulatory clearance, it's going to be selling doses at the exact price that it costs to make. So that may change after the pandemic is under control. But Adria, when can we expect data from Johnson & Johnson's phase 3 trial and how should investors think about this stock in the context of it not even planning to profit from this program?

Adria Cimino: Well, we can expect data probably at the end of the month. That's what they've been saying -- around the end of the month. They even said that if everything is positive and all, they would apply for emergency authorization in February. So, this is really right around the corner. Johnson & Johnson has the advantage that it's a one dose vaccine, can be stored at your normal refrigerator temperatures. So, there are plenty of advantages. But again, they're not going to benefit as far as profit. So the idea is: Is the stock really going to benefit from it? I think that even if they were taking a big profit on it right now, it's not something that J&J would really benefit as much as the clinical stage biotech companies. It's really a vast company with so many products, it's a large market cap. So it doesn't have as much potential to move on smaller news. It doesn't depend on the coronavirus vaccine. If you're looking for share gains based on coronavirus news, I would be very surprised to get them out of J&J. Maybe it will move a little bit with some good news, but it would be nothing like Novavax (NVAX -8.57%). I wouldn't expect something like that to happen. But that doesn't mean you shouldn't by Johnson & Johnson. I would say that the reason to buy Johnson & Johnson is for overall growth, and really just long-term overall growth, revenue, net income, share price. They've all grown, generally grown, over the past 10 years. It's also a dividend king -- that means it's raised its annual dividend every year for the past 50 years. Now, the dividend is at $4.04 a share and with a yield of 2.55%. That's something to look at, and I'd say that to invest in Johnson & Johnson would be more for those reasons than for the coronavirus vaccine. That's just a little plus.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
$176.98 (1.75%) $3.04
Novavax, Inc. Stock Quote
Novavax, Inc.
$53.42 (-8.57%) $-5.01

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.