Ronny Gal, an analyst at Bernstein, predicts that coronavirus vaccines will generate $ 40 billion in sales in 2021. What is especially surprising about this number is that the market did not exist until December.
Large markets create great opportunities for investors. But what are the best ways to take advantage of this specific opportunity? Here are three fantastic coronavirus stocks to buy now.
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1. Johnson & Johnson
Johnson & Johnson (NYSE: JNJ) to announce the results of a final stage study of its vaccine COVID-19, JNJ-78436735, very soon. It is no exaggeration to say that this vaccine can be a game changer if it proves to be safe and highly effective. Unlike all other major coronavirus vaccines, JNJ-78436735 requires only a single dose.
What about J&J’s commitment to sell its COVID-19 vaccine at cost during the pandemic? Of course, this means that the health giant’s earnings will not be increased in the short term, even if JNJ-78436735 is successful. However, the pandemic will not last forever. A single dose vaccine could generate billions of dollars in sales for J&J in the coming years.
Most importantly, JNJ-78436735 is not the primary reason to consider buying Johnson & Johnson shares. An even more convincing argument for investing in J&J is that it is the largest player in health, one of the largest sectors with strong long-term growth prospects. The company also offers significant diversification in the healthcare industry as a leader in consumer health, medical devices and pharmaceuticals.
Another very good reason to buy Johnson & Johnson shares is your dividends. The company is a Dividend King – an elite group of S&P 500 members who have increased their dividends for at least 50 consecutive years. For income investors looking for stability, there is simply no better stock of coronavirus vaccine out there than J&J.
2. Pfizer
When the history books are written about the pandemic, Pfizer (NYSE: PFE) it will almost certainly be mentioned. The major pharmaceutical company quickly changed to a partnership with German biotechnology BioNTech (NASDAQ: BNTX) early 2020. The two companies’ COVID-19 vaccine became the first to obtain authorization for emergency use in the USA
That vaccine, Comirnaty (formerly known as BNT162b2), could earn $ 14 billion and perhaps more this year. Pfizer will split sales by 50-50 with BioNTech. Partners are working to develop a lyophilized version that does not require ultracold storage, which may be ready by the end of 2021. This version could set the stage for Pfizer to generate huge recurring revenues with Comirnaty in the long run. Unlike Johnson & Johnson, Pfizer will profit from its COVID-19 vaccine from the start.
Even without including the positive impact of Comirnaty, Pfizer expects to deliver adjusted annual earnings growth of around 10% in the coming years, with annual revenue growth of around 6%. These are risk-adjusted projections, so growth rates are not dependent on the outcome of all Pfizer pipeline candidates.
Don’t ignore Pfizer’s dividends. The company is not a dividend royalty like J&J, but its dividends yield more than 4%.
3. Novavax
Risk-averse investors are likely to like Johnson & Johnson and Pfizer. But what about more aggressive investors? Novavax (NASDAQ: NVAX) it could just be the ticket.
Like J&J, Novavax hopes to release soon the results of the final stage of its candidate vaccine COVID-19. However, there is a problem: this final stage study is being conducted in the United Kingdom. Novavax did not begin its final stage study in the USA until the end of December, so it will take several months before the results are available.
Still, Novavax can be a big winner in the coronavirus vaccine market. Ronny Gal, of Bernstein, believes that biotechnology will earn US $ 3.8 billion this year. If he is right, Novavax’s market capitalization will skyrocket much more than its current level of around $ 8 billion.
Novavax also has another promising candidate in the experimental NanoFlu flu vaccine. He has already passed final stage tests. The company only needs to complete a manufacturing batch consistency test to apply for US approval. With two potential blockbusters waiting on the wings, I think Novavax’s risk-reward profile undoubtedly makes it the best coronavirus action for 2021.