There is a good chance that you now have an extra $ 1,400 in your hands. The latest round of stimulus payments has already been distributed to many Americans. If you meet the eligibility criteria, your payment must be forwarded, if you have not yet received it.
The best thing to do with the money is to pay any outstanding bills and make sure you have created an emergency savings account. What is the next best thing to do with your stimulus payment? Invest.
An important alternative to investing your newfound money is to buy shares in companies that provide tests, therapies or vaccines for the coronavirus. Even with the hope that the end of the pandemic is near, COVID-19 will likely remain with us for a long time. But the problems also present opportunities for investors. If you have $ 1,400 to invest, here are three shares of COVID to buy and hold in the long run.
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1. Abbott Labs
Abbott Labs (NYSE: ABT) achieved remarkable success in the development and commercialization of diagnostic tests for COVID-19. The company’s COVID tests generated $ 2.4 billion in sales during the fourth quarter of 2020.
CEO Robert Ford said in Abbott’s fourth quarter conference call that he expects demand for COVID-19 testing “to remain high, even with the launch of vaccines.” The emergence of new variants of the coronavirus may continue to drive demand for Abbott’s diagnostic tests in the coming years.
But Abbott is not just dependent on its COVID test for growth. The FreeStyle Libre continuous glucose monitoring system is at the top of the list. Libre Sense Glucose Sport extends the focus of Abbott’s wearable biosensor beyond diabetes.
MitraClip G4, the latest version of the company’s system for repairing leaking mitral heart valves, has now expanded Medicare coverage, giving it a much larger potential market. And these are just some of the company’s products designed to generate ever greater sales.
Analysts project that Abbott’s earnings will grow by almost 16% on average over the next five years. The company also pays a solid dividend to take off. Expect dividends to continue to rise: Abbott is classified as a Dividend Aristocrat, with 49 consecutive years of dividend increases.
2. Johnson & Johnson
Johnson & Johnson (NYSE: JNJ) boasts a dividend history even more impressive than Abbott. The health giant is a Dividend King with an impressive 58 consecutive years of dividend increases. J&J will likely extend this streak for another year.
The company currently markets the only single-dose vaccine COVID-19 available in the United States and Europe. Johnson & Johnson is currently selling the vaccine at cost for emergency pandemic use. However, profits are likely to begin to decline as soon as the pandemic ends.
J&J’s medical device business was negatively affected by the pandemic as medical procedures were postponed. The good news, however, is that increasing availability of vaccines (including the company’s own vaccine) is helping to change things.
In the long run, Johnson & Johnson should be able to deliver consistent and solid growth. The company’s diversification into several health areas, including consumer health products, medical devices and pharmaceuticals, makes J&J one of the safest health stocks on the market to buy and maintain.
3. Pfizer
Few companies have had as big an impact in the fight against COVID-19 as Pfizer (NYSE: PFE). The big pharmaceutical company, together with its partner BioNTech, became the first to obtain the US Emergency Use Permit for a COVID-19 vaccine in December.
Sales of Pfizer’s COVID-19 vaccine could easily reach $ 20 billion this year. The company expects annual booster doses to be necessary. If you’re right, Pfizer should have solid recurring prescriptions for its COVID-19 vaccine for a long time. The company is also developing an oral antiviral drug for the treatment of COVID-19.
However, like Abbott and Johnson & Johnson, Pfizer does not depend on its COVID-related programs to succeed. The company’s current line includes several highly successful products with growing sales. Pfizer also has a pipeline loaded with 24 programs in the final stage.
Although Pfizer is not a Dividend Aristocrat or a Dividend King, the pharmaceutical company offers one of the most attractive dividends out there. With its big dividends and strong growth prospects, Pfizer should be able to deliver solid total returns to investors over the long term.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.