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What Are the Best COVID Vaccine Stocks for Conservative and Aggressive Investors?

By Keith Speights and Brian Orelli, PhD - Updated Mar 7, 2021 at 8:56AM

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Here's how the leading stocks stack up.

There are several stocks you can buy to profit from the COVID-19 vaccine market, but which ones are ideal for you depends in large part on your investing style. In this Motley Fool Live video recorded on Feb. 24, 2021, contributors Keith Speights and Brian Orelli discuss which COVID-19 vaccine stocks are the best picks for aggressive and conservative investors.

Keith Speights: We basically have six leaders or potential leaders in the U.S. COVID-19 vaccine space. There's Pfizer (PFE 3.00%), of course, along with its partner BioNTech (BNTX 1.32%), ticker there's BNTX, there's Moderna (MRNA 0.70%), ticker there's MRNA, Johnson & Johnson (JNJ 1.46%), JNJ is the ticker there, Novavax (NVAX -0.27%), NVAX is the ticker, and AstraZeneca (AZN 3.80%), AZN is the ticker there.

If you were to compare these six leaders or potential leaders, which of these do you think is the best pick for conservative investors and which is the best pick for aggressive investors? Because I think you'll probably come with two different answers there?

Brian Orelli: Yeah. I think if you're going to pick these, we need to look at the entire company, not just their likelihood of success in coronavirus or how much the coronavirus is going to affect their top line.

Like Johnson & Johnson: They're not planning on making any profits from the coronavirus, so we put them at the bottom, but I think they're a great company, and if you're looking for a dividend or risk spread, and you're looking for a lot of diversification in healthcare, you can basically buy a healthcare ETF or you can buy a Johnson & Johnson, [laughs] and you are probably going to get about the same return.

Johnson & Johnson is probably going to grow about the same as an overall large-cap healthcare ETF. Just because they are so well diversified, the chances that they're going to have a major issue that causes a major change in the valuation is pretty low because of how big they are that any one product is not that big of a deal.

Pfizer I like because they are developing, they're going more drug oriented, so they spun off their generic drugs, and they've spun out their consumer healthcare division that would sell like over-the-counter products. But although it's still part of the company right now, but eventually, they've combined it with GlaxoSmithKline's consumer healthcare division, and that's eventually going to probably IPO, and then they'll get some cash from that, and they won't have that on the books anymore. They can use that cash then to grow their pipeline.

I don't follow AstraZeneca that much, but I feel like it's a pretty slow-growing pharma, so that would be probably my third choice of the big pharmas.

In terms of the smallest of the three -- Moderna, BioNTech, and Novavax -- I own Novavax. I like that company, mostly due to valuation, not because I think that Moderna and BioNTech's mRNA technology isn't great, because I definitely think it's great. I just think that a lot of future growth is already priced into their valuations. That's the reason why I own Novavax and not Moderna and BioNTech.

I wish I had bought [laughs] Moderna and BioNTech when I wasn't so convinced that their technology worked as I am now. [laughs] But their valuations were a lot lower. I wish I'd bought then, but I didn't feel confident in the likelihood of success. But now we've seen it work, so I'm a lot more confident, but the valuations seem a little outrageous, in my opinion.

Speights: Yeah. I would tend to agree with you, Brian. I do think conservative investors won't go wrong buying Johnson & Johnson stock. I'm a Pfizer shareholder. I think Pfizer is poised for better growth now. I don't think the market has really recognized Pfizer's growth potential. It's not embedded in the valuation of the stock yet, but I think we'll see that improve over the next year or so.

If you're an aggressive investor, I think Novavax is still a great stock to buy, still has a lot of room to run. They haven't won EUA yet, but I think they'll likely do so within the next...probably win EUA in Europe and the UK relatively soon, and not too far in the future in the US, so I think they have a lot of potential. They also have another vaccine. They have a flu vaccine, NanoFlu, that looks very promising.

Orelli: If we're talking about coronavirus going on for a long time, they have the potential to combine those two, which would be definitely a nice deal because you only have to get one shot versus two.

Speights: Yeah. Their market cap is still, I haven't looked this morning, still only around $15, $16 billion. That's still well below some of these other companies, even the relatively smaller biotechs in the COVID-19 vaccine space. I think Novavax definitely can still go up a good bit even after it has delivered some tremendous gains over the last year or so.

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Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
$51.67 (-0.27%) $0.14
Pfizer Inc. Stock Quote
Pfizer Inc.
$51.59 (3.00%) $1.50
Johnson & Johnson Stock Quote
Johnson & Johnson
$182.29 (1.46%) $2.63
GSK Stock Quote
$43.69 (2.20%) $0.94
AstraZeneca PLC Stock Quote
AstraZeneca PLC
$66.90 (3.80%) $2.45
Moderna, Inc. Stock Quote
Moderna, Inc.
$144.27 (0.70%) $1.01
BioNTech SE Stock Quote
BioNTech SE
$134.04 (1.32%) $1.75

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

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