Now that 2022 is in the books, it is safe to say investors won't remember it fondly. The economy and the market suffered throughout last year, severely affecting businesses worldwide and dragging down even quality stocks. Amid these troubles, some corporations managed to perform much better than most.
Biotech giant Gilead Sciences (GILD 1.90%) and payment technology specialist Visa (V 1.32%) were among them. Moreover, these two companies have the tools to deliver market-beating returns again.
NASDAQ: GILD
Key Data Points
1. Gilead Sciences has a pipeline that keeps growing
Gilead Sciences ended 2022 on a positive note. On Dec. 22, the drugmaker announced that the U.S. Food and Drug Administration (FDA) had approved Sunlenca, a long-acting HIV treatment option. Sunlenca is the first twice-a-year HIV regimen to make it past regulatory agencies. It was also granted approval in Europe in August.
This new addition to Gilead Sciences' portfolio is an important one. For one, the HIV drug market declined during the coronavirus outbreak, but it has recovered to its pre-pandemic levels, according to management. Launching a new innovative medicine at this time is sure to attract plenty of eligible patients, especially because it is a long-acting option.
Second, Gilead Sciences has relied on its coronavirus therapy, Veklury, to keep its revenue afloat for much of the pandemic years. It is unclear how much Veklury will contribute to its top line moving forward. That will largely depend on how well we can contain surges in coronavirus cases. But even if Veklury's sales continue to drop, Sunlenca will help compensate for it.
Gilead Sciences' revenue decreased by 5% year over year in the third quarter to $7 billion. Excluding sales of its COVID-19 medicine, the biotech's top line jumped by 11% year over year to $6.1 billion. Putting the effects of Veklury behind it should work wonders for Gilead Sciences' revenue growth.
The rest of Gilead Sciences' HIV lineup is also performing well. Its top-selling product in this area, Biktarvy, has achieved a revenue run rate in excess of $10 billion, although sales continue to grow fast. It is the leading HIV treatment in the U.S., with a 45% market share. Descovy leads the HIV PrEP space with about 40% market share These two medicines should continue to dominate.
That's to say nothing of the rest of Gilead Sciences' business, including an improving oncology business that should deliver solid pipeline progress this year. The biotech boasts more than 60 clinical programs across all of its therapeutic areas, indicating the very real possibility of new approvals and label expansions.
Finally, Gilead Sciences is an excellent dividend stock, offering an attractive yield of 3.32%. The company has raised its payouts by a respectable 28% in the past five years. That's just one more reason investors shouldn't pass up on this top biotech stock.
NYSE: V
Key Data Points
2. Visa has loads of untapped volume
Visa did not end 2022 in the green. The company's shares declined by about 4% last year. But that's still much better than the S&P 500 over the same period. Visa performed relatively well last year due to solid financial results, and there were several reasons behind the company's robust earnings.
First, Visa's cross-border volume and transactions increased at a good clip last year after dropping during the pandemic years.
Second, the inflationary environment helped boost the company's total payment volume. Visa makes money by taking a percentage of every transaction it helps process. The same cut applied to a higher price results in a higher transaction fee for the company. During Visa's fiscal year 2022, which ended on Sept. 30, its revenue increased by 22% year over year to $29.3 billion, with cross-border volume increasing by 38% year over year.
Visa processed $11.6 trillion in payment volume during its fiscal year 2022, representing an increase of about 11.5% year over year. The best thing about Visa is that although it has benefited from the transition to digital forms of payment for years, there is still substantial room for growth, and the company will continue to ride this shift for a while.
According to some estimates, around 20% of adults worldwide have a credit card. That number varies significantly from one region to another, with more developed countries typically having much higher credit card usage. Still, the point is that Visa and its peers in this industry have only captured a relatively small portion of the worldwide opportunity. And as one of the undisputed leaders in this field, Visa will continue to benefit.
That's why it's worth sticking with the company moving forward.
