Earlier in the pandemic, coronavirus products boosted the revenue and the stock prices of companies selling those products. But these days, those products actually have done just the opposite, dragging down performance.
It's important to keep in mind, though, that some of these players offer (or are set to offer) revenue growth well beyond the coronavirus portfolio. So right now, with their shares trading at bargain prices, they've become no-brainer buys.
Which companies am I talking about? Coronavirus testing giant Abbott Laboratories (ABT 0.15%) and vaccine leaders Moderna (MRNA 1.55%) and Pfizer (PFE 1.02%). Let's take a closer look at each of these stocks as possible buys right now.
Image source: Getty Images.
1. Abbott Laboratories
Abbott Labs became a coronavirus testing giant during the pandemic. But this company has four strong units that continue to deliver growth, even as demand for coronavirus testing declines.
The healthcare giant's diagnostics, medical devices, established pharmaceuticals, and nutrition businesses each grew in the double digits in the most recent quarter if we exclude coronavirus tests from the calculations. And these businesses together, excluding COVID tests, generated sales growth of more than 13% to $10 billion.
The company also has grown profit into the billions of dollars over time, thanks to its strengths across these businesses, and remains a giant in the area of diabetes care. Abbott sells one the of the leading continuous glucose monitors, the FreeStyle Libre, which reported a sales increase of 30% in the recent quarter.
NYSE: ABT
Key Data Points
You'll like Abbott for its solid earnings track record, its four strong businesses -- and one other thing -- its dividend. Abbott is a Dividend King, meaning it's increased payments for more than 50 straight years, so you can count on this company for passive income growth.
Trading at 24x forward earnings estimates, this stock is a must-buy right now.
2. Moderna
Moderna took center stage as it brought its coronavirus vaccine from the drawing board to market in less than a year -- and the vaccine generated billions of dollars in earnings as the biotech's first and only product. Those earnings helped Moderna build up cash and fund other programs in the pipeline.
Today, even though vaccine demand is on the decline, Moderna's future looks bright. First, vaccine demand isn't what it was at the height of the pandemic but isn't disappearing. Seasonal vaccination should represent significant recurring revenue for Moderna. And the company is developing a combined COVID/flu candidate that may become a popular product as it could interest the population that generally goes for an annual flu shot.
NASDAQ: MRNA
Key Data Points
Second, Moderna may not be a single-product company for long. The biotech says it aims to launch 15 new products within the coming five years. Even if it only wins approval for a few, it still could deliver impressive growth.
That's why, trading at 8.5x forward earnings estimates, Moderna looks like a bargain you don't want to miss.
3. Pfizer
Like Moderna, Pfizer sells one of the leading coronavirus vaccines -- and Pfizer sells a billion-dollar coronavirus treatment, Paxlovid. Also, like Moderna, Pfizer faces declines in sales of these products. On top of that, some of Pfizer's other blockbusters outside of the coronavirus program are facing patent expirations later this decade -- and this should lead to a drop in sales.
Why should you buy this stock? Because Pfizer is prepared to compensate for those losses -- and go on to grow over the long term, thanks to new products. The company aims to launch 19 new products or indications during an 18-month period, and has already released 13. So it's well on its way to meeting the goal.
NYSE: PFE
Key Data Points
Pfizer also pays a dividend, with a yield that beats that of the S&P 500, and has put the focus on dividend growth. So, you can count on this company for passive income while you wait for the return to earnings growth.
For all of this, 18x forward earnings estimates seems a reasonable price to pay, making this stock a no-brainer to add to your portfolio right now.
