What's the biggest misconception about investing? The idea that you need a lot of money to get started is certainly a contender. The reality is that it doesn't take much up-front cash.
Three Fool.com contributors have identified no-brainer stocks to buy for under $100 right now. Here's why they picked two big pharma stocks -- AstraZeneca (AZN +0.00%) and Pfizer (PFE +0.56%) -- along with one biotech stock, Exelixis (EXEL +2.31%).
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It's still time to buy the dip on this stock
Prosper Junior Bakiny (AstraZeneca): Last year, U.K.-based pharmaceutical giant AstraZeneca faced significant headwinds. Legal issues in China rocked the drugmaker as its CEO in the country, Leon Wang, was investigated and arrested.
This issue cast a cloud over what would have otherwise been a strong year for AstraZeneca, since its financial results were generally strong. Despite decent gains this year, the stock is down 10% over the trailing-12-month period, significantly lagging behind the S&P 500 (^GSPC +0.35%).
Investors should pounce on this opportunity to buy the stock. Here are three reasons why.
First, AstraZeneca continues to deliver solid financial results. In the first quarter, the company's revenue increased by 7% year over year to $13.6 billion. AstraZeneca's earnings per share came in at $2.49, 21% higher than the year-ago period.
NASDAQ: AZN
Key Data Points
Second, AstraZeneca has a deep pipeline that should allow it to overcome patent cliffs. The company recorded about 13 approvals or label expansions through the end of the first quarter. Some of AstraZeneca's promising candidates include a pair of investigational weight management medicines: AZD5004 and AZD6234. The company has almost 200 programs in its pipeline.
Third, AstraZeneca looks reasonably valued. The company's forward price-to-earnings ratio of 16.3 is almost identical to the healthcare industry's average of 16.2. AstraZeneca's shares are changing hands for about $71 apiece, as of this writing. The stock looks like a no-brainer at current levels, given its strong underlying business.
Exelixis is a biotech stock that's just starting to take off
David Jagielski (Exelixis): Oncology company Exelixis has been experiencing a lot of growth recently and possesses even more potential in the long run. Shares of this biotech stock were trading around $40 to start the week, and have risen by more than 25% year to date. Despite its already solid gains, this can still be a no-brainer buy if you're an investor looking for a good growth stock to simply hang on to for the long haul.
NASDAQ: EXEL
Key Data Points
The company's top drug, Cabometyx, has been approved to treat multiple types of cancers and has been driving the lion's share of the revenue growth for the business. Through the first three months of 2025, the company's top line rose by 36% to $513.3 million, with nearly all of that coming from Cabometyx. The results were so strong that Exelixis has boosted its revenue guidance for the year by $100 million. The drug is in late-stage trials as a possible treatment to help with prostate cancer and renal cell carcinoma, which can add to its growing list of indications.
Another promising drug and potential growth catalyst to watch out for is zanzalintinib, as it is also involved in multiple late-stage trials, including colorectal cancer.
Exelixis stock is currently trading at just 19 times trailing earnings. But with some strong growth prospects and the company generating an impressive 28% profit margin over the trailing 12 months, this can be a no-brainer buy to hang on to. Even though it's been beating the market this year, it's still not too late to add Exelixis stock to your portfolio.
More to like than meets the eye
Keith Speights (Pfizer): I'll readily admit that, at first glance, Pfizer doesn't look like a no-brainer stock to buy. The big drugmaker's share price has plunged roughly 60% from its COVID-19 pandemic peak in late 2021. Pfizer stock is down 14% over the last 12 months, with its share price currently hovering around $24. The company faces a major patent cliff over the next few years as well.
NYSE: PFE
Key Data Points
However, there's more to like about Pfizer than meets the eye. Its dividend ranks high on the list. Pfizer's forward dividend yield tops 7%. The company's management remains committed to maintaining and growing the dividend going forward, too.
Valuation is another big plus for Pfizer. Its shares trade at only 8.3 times forward earnings. By comparison, the average forward price-to-earnings ratio for the S&P 500 healthcare sector is 16.7.
Pfizer's growth prospects could also be better than many investors think. The drugmaker has several newer products for which sales continue to soar. Its pipeline features 108 programs in clinical development, 33 of which either await regulatory approval or are in late-stage testing.
An ultra-high dividend yield. A dirt cheap valuation. Perhaps surprisingly strong growth prospects. I think that's enough to make Pfizer a no-brainer stock to buy right now.
