Which COVID-19 vaccine is the best? The correct answer is that it depends on which factor is most important to you.
Comirnaty (BNT162b2), the vaccine developed by BioNTech (NASDAQ: BNTX) and your great partner Pfizer (NYSE: PFE), had the greatest overall effectiveness in final stage tests. But Modernin (NASDAQ: MRNA) the effectiveness of mRNA-1273 was almost as high. Biotechnology has also developed a formulation that does not have the strict ultracold storage requirements that Comirnaty has.
Johnson & Johnson (NYSE: JNJ) just reported an OK, but not too impressive, result of the effectiveness of your vaccine. However, it requires only a single dose – a big advantage. So there is Novavax (NASDAQ: NVAX). Biotechnology announced great efficacy and safety results for its COVID-19 vaccine last week. The downside is that the results are from a UK study. It will take a few more months before the results of Novavax from a study in the United States and Mexico are available.
The same “depends” answer also applies to the question of which is the best stock of COVID vaccine. That’s how I think Pfizer, BioNTech, Moderna, Johnson & Johnson and Novavax are classified for different types of investors.
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For income investors
Let’s start with a relatively easy comparison. Income investors want dividends. We can immediately eliminate BioNTech, Moderna and Novavax from containment because they currently have no dividend programs. That leaves only Johnson & Johnson and Pfizer.
If your main focus is performance, Pfizer is the best choice. Its dividends currently yield over 4.3% compared to 2.4% for J&J. Although Pfizer’s dividends are slightly lower going forward, now that it has broken up its Upjohn unit, its earnings are still likely to be well above Johnson & Johnson’s.
On the other hand, if you place a higher priority on dividend history, J&J is the obvious choice. The health giant is a Dividend King, with an impressive 58 consecutive years of dividend increases.
For value investors
It is also not a difficult decision to select the best COVID vaccine stock for value investors. Value investors typically focus on metrics based on earnings or sales. This removes BioNTech, Moderna and Novavax from the list.
Based on any of the most commonly used valuation metrics, Pfizer appears to be the winner over Johnson & Johnson. For example, Pfizer shares are traded at less than 11.5 times the expected profit. J&J shares are traded at almost 19 times the expected earnings.
For growing investors
Now, the most difficult choice: choosing the best of these stocks for growing investors. The table is turned this time. Neither Pfizer nor Johnson & Johnson has the potential for sales and profit growth as great as smaller biotech stocks.
We can also discard BioNTech. You must share all sales of Comirnaty with Pfizer. The company also has no other pipeline candidates in the final testing stage that could be on the market in the near future.
So, which growth action wins in a direct confrontation between Moderna and Novavax? I go with Novavax. Perhaps most importantly, Novavax’s market capitalization is much lower than that of Moderna. This should give Novavax more room to function if its COVID-19 vaccine obtains emergency use permits (which I am confident it will).
This relates to another reason why Novavax is the best choice for growth investors. Biotechnology still has several major catalysts en route to its NVX-CoV2373 coronavirus vaccine, including potential UK authorization, final stage results from its study in the USA / Mexico and potential emergency use authorization in the USA.
Novavax also has another promising candidate with a high chance of getting regulatory approvals – the NanoFlu flu vaccine. If approved, NanoFlu can become a blockbuster in itself. As an added bonus, Novavax is exploring the potential to develop a combined COVID / flu vaccine with NVX-CoV2373 and NanoFlu.
Multiple winners
My view is that Pfizer and Johnson & Johnson are great options for more conservative investors, especially retirees and others who want to make a profit from dividends. I think Novavax is the best choice for more aggressive investors looking for strong growth.
The good news, however, is that all of these actions can be successful in the long run. Moderna offers a tempting platform based on its messenger RNA (mRNA) technology. BioNTech also has promising vaccines and mRNA therapies under development, as well as candidates using other approaches. I suspect that 10 years from now, investors who bought any of these shares will not regret it.