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3 Great Stocks to Buy With the Omicron Variant Spreading Like Wildfire

By Keith Speights – Dec 21, 2021 at 12:53AM

Key Points

  • Abbott stands to enjoy a surge in COVID-19 test sales with the spread of the omicron variant.
  • Pfizer is poised to win on two fronts -- with its vaccine and its COVID-19 pill.
  • Teladoc could experience higher numbers of telehealth visits due to concerns about omicron.

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Bad news related to COVID-19 could be good news for these stocks.

Broadway's lights have dimmed with several shows canceled. The famous Rockettes won't perform any more this year. The National Hockey League has delayed games between U.S. and Canadian teams.

Blame it all on the coronavirus omicron variant. The latest viral strain is so highly contagious that the number of infected people doubles within two or three days. U.S. government healthcare officials are warning that COVID-19 cases could skyrocket this winter.

We've seen in the past that increased COVID-19 concerns can lead to greater opportunities for some companies. Here are three great stocks to buy with the omicron variant spreading like wildfire.

Street sign reading "Omicron Variant" with a blurred city street in the background.

Image source: Getty Images.

1. Abbott 

Abbott (ABT 2.20%) made $1.9 billion in the third quarter from sales of its COVID-19 testing products. The company expects to generate between $1 billion and $1.4 billion from its COVID-19 tests in the fourth quarter. It's a pretty safe bet that sales total will increase as the omicron variant spreads over the coming months.

There is a potential downside for Abbott, though. The company's medical device sales fell quite a bit in 2020 with many healthcare providers bracing for a COVID-19 surge. It's possible that Abbott could experience some pain with the rise of the omicron variant.

However, the omicron variant didn't appear to be as severe in South Africa compared to earlier coronavirus variants. If this is also the case in the U.S. and other major markets for Abbott, the company might have only minimal negative repercussions but plenty of positive upside potential for its COVID-19 tests.

Investors have other reasons to really like Abbott as well. The company has several growth drivers, notably including its FreeStyle Libre continuous glucose monitoring devices. Abbott also recently increased its dividend for the 50th consecutive year, joining the elite group of stocks known as Dividend Kings

2. Pfizer

You probably expected that vaccine makers would benefit from the spread of the omicron variant. But Pfizer (PFE 1.04%) could be a winner on two different fronts.

The European Union recently exercised its option to buy another 200 million doses of Comirnaty, the COVID-19 vaccine developed by Pfizer and its partner, BioNTech. The additional order will allow the EU to purchase doses of the omicron-specific vaccine Pfizer and BioNTech are developing. 

It remains to be seen if the omicron variant will result in higher sales of Comirnaty in the U.S. The federal government has already committed to buying 500 million doses of the vaccine plus another 500 million to donate to other countries. But Pfizer will likely profit from the omicron variant with its COVID-19 pill, Paxlovid.

Pfizer already has a $5.29 billion deal with the U.S. to provide 10 million doses of Paxlovid pending authorization. Although the drug hasn't won authorizations anywhere yet, they're likely on the way soon. An intense surge in COVID-19 cases could lead to even more sales for Paxlovid.

3. Teladoc Health

We saw a spike in the use of telehealth services during the initial COVID-19 waves in 2020. The trend lit a fire beneath Teladoc Health's (TDOC 6.02%) shares. Omicron could get the fire burning yet again.

The highly transmissible nature of the omicron variant could make Americans more reluctant to visit physicians in person -- even if they're already fully vaccinated. For many illnesses, telehealth is a great alternative. And Teladoc offers virtual care visits 24 hours a day, seven days a week. 

The telehealth stock is also poised for a comeback. Teladoc's shares are down more than 50% year to date, mainly on concerns that growth is slowing due to the pandemic waning. If those concerns rebound, it's likely that Teladoc stock will too.

But Teladoc's long-term prospects appear to be bright regardless of what happens with COVID-19. Its virtual care solutions are cost-effective for payers and convenient for patients. Even as others jump into the telehealth market, Teladoc remains the clear leader.

Keith Speights owns Pfizer and Teladoc Health. The Motley Fool owns and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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