Roche Holding (RHHBY -0.60%) and Gilead Sciences (GILD -0.74%) both saw increased sales during the pandemic, due in part to their COVID-19 products. For Gilead, it was its COVD-19 antiviral, Veklury, and for Roche, its revenue was boosted mostly by coronavirus tests.

Now the large-cap drug companies are looking for growth beyond COVID-19 sales. Gilead's shares have glittered in 2022, with the stock up more than 16%, while Roche's have fallen more than 23% so far this year. The question is, which healthcare stock is the better buy now?

Oncology, HIV therapies give Gilead an edge

Gilead reported third-quarter revenue of $6.99 billion, down 5%, year over year, and earnings per share (EPS) of $1.42, down from $2.05 in the third quarter of 2021. Through nine months, Gilead's revenue of $19.9 billion represents a drop of 1% over 2021. 

The combination of the stock's rise and declining revenue has made Gilead a little pricier as it trades for 32 times earnings. In the long run, however, there's reason for optimism, because, if you take out Veklury sales from the equation, the company's third-quarter revenue would have been up 11% over the same period last year. The company also has an active pipeline, including 15 ongoing phase 3 trials.

The company's growing stable of HIV and oncology therapies should continue to drive the company's sales. HIV therapy sales rose 7% year over year to $4.5 billion, and the company just got approval on Dec. 22 from the Food and Drug Administration (FDA) for Sunlenca as a twice-yearly treatment for multidrug-resistant HIV.

The company's third-quarter oncology sales rose 79% year over year, led by three cell therapies: Trodelvy, Yescarta, and Tecartus. Breast cancer drug Trodelvy saw sales of $180 million, up 78% over the same period last year. Yescarta, used to treat large B-cell lymphoma, saw sales climb 81% year over year to $318 million, and Tecartus, which has been approved to treat relapsed or refractory B-cell acute lymphoblastic leukemia and relapsed or refractory mantle cell lymphoma, saw sales rise to $81 million, up 78% over the same period last year.

Gilead raised its quarterly dividend by 2.8% this year to $0.73 per share, equaling a yield of around 3.45%, nearly double that of the S&P 500 average. The company has raised its dividend every year since it began offering one in 2015.

Roche is priced at a discount

Roche's growing portfolio and pipeline of oncology and immunology drugs sets it apart. In December, the company got two key approvals for Hemlibra and Lunsumio.

Hemlibra, already approved by the FDA to treat hemophilia A with inhibitors, was approved in Europe to expand that label to treat moderate hemophilia A patients without factor VIII inhibitors on Dec. 16. It's likely that an FDA approval for that indication will follow.

Lunsumio, a bispecific antibody, was given FDA approval on Dec. 23 to treat adults with relapsed or refractory follicular lymphoma who have had two or more types of previous therapies. The drug is also in several clinical trials as a combination and monotherapy to treat various B-cell non-Hodgkin lymphomas, and other blood cancers. Follicular lymphoma is the most common form of slow-acting non-Hodgkin lymphoma.

The Swiss pharmaceutical company, which trades for around 16 times earnings, is making up for lost sales from its COVID-19 therapy. Revenue for the third quarter was $25.5 billion, down 7% year over year, but through nine months it reported revenue of $50.69 billion, compared to $50.36 billion in the same period last year. Nine-month diagnostic sales were $14.9 billion, up 4% over the same period last year.

Pharmaceutical sales were flat at $33.2 billion, but the company saw increased sales for Hemlibra (up 28% year to date), multiple sclerosis drug Ocrevus (up 27%), spinal muscular atrophy drug Evrysdi (up 101%), and Phesgo, a breast cancer therapy, whose sales are up 150% over the first nine months of 2022.

It's also seeing strong sales from eye drug Vabysmo, which launched at the beginning of this year. Plus, the company has a large late-stage pipeline with 17 phase 3 studies expected to conclude in 2023.

Roche has an above-average dividend, which it raised by 1.6% this year to $1.24 per share, representing a yield of around 1.97%.

Sometimes, the choice is difficult

Both stocks seem to be finding replacements for lost COVID-19 sales, but of the two, Roche seems to be the better buy right now. With a price-to-earnings ratio of 16.6, it trades for nearly half the P/E that Gilead does. On top of that, Roche has a few more late-stage therapies in its pipeline and, through nine months, has already seen a revenue improvement year over year.

The one advantage Gilead has is a better dividend yield, but that's not enough to make up for declining revenue numbers.