COVID Stocks Can Still Offer Upside If You Focus on the Right Companies
Not long ago, essentially any company that had exposure to COVID vaccines, treatments, or testing saw their stock prices catch a bid. That’s not so much the case these days, evident in the fact that parabolic rallies in stocks like Moderna and Pfizer have fizzled out. With that said, there are still several COVID stock plays that are worth looking at given their potential for real staying power. Keep in mind that although vaccines have helped reduce the severity of the global pandemic, there is still going to be a need for certain products and services that help governments and healthcare systems deal with the virus.
What’s also great about some of these companies is that they offer investors diversified business models that aren’t entirely dependent on one vaccine or product to deliver earnings growth. These are businesses playing a key role in fighting the pandemic and could deliver strong shareholder value over the long term, which means that they are worthy of your attention. That’s why we’ve put together a list of 3 COVID stock plays that are here to stay. Keep reading on below to learn more.
This is a major biopharmaceutical company that is making headlines for creating a potentially revolutionary COVID-19 antiviral pill called molnupiravir. Merck produces a wide range of prescription drugs and vaccines in many therapeutic areas both in the United States and abroad, and its top-selling cancer drug Keytruda is the perfect example of how a blockbuster drug can drive earnings growth for biotech companies. Merck could have another massive growth opportunity on its hands going forward with molnupiravir, especially if it receives FDA approval in the coming months.
It’s easy to recognize the upside with molnupiravir, the first oral antiviral treatment for the COVID virus, since it is much easier to distribute and administer versus the current batch of vaccines. This week, Britain became the first country in the world to approve the company’s antiviral pill, which the country’s medical regulator announced is “safe and effective at reducing the risk of hospitalization and death” in mild to moderate COVID-19 cases. This could be the first of the major dominoes to fall in favor of Merck
with its new treatment, making this one of the premiere COVID stocks to consider adding at this time.
Another solid COVID play that investors should be looking at is Regeneron, a biotechnology company that focuses on the discovery and development of therapeutics to treat metabolic disorders, cancer, inflammatory diseases, and respiratory conditions. The company’s COVID-19 antibody treatment, REGEN-COV, has been boosting revenues in the near term and helped Regeneron deliver an outstanding Q3 earnings report. Regeneron
beat consensus EPS estimates by $5.83 with Q3 EPS of $15.37, a truly impressive quarter that was driven by $804 million in sales of the company’s COVID antibody treatment.
The company announced back in September that the U.S. government agreed to purchase an additional 1.4 million doses of REGEN-COV, which is clearly a sign that it’s a valuable tool in the fight against COVID hospitalizations and deaths. Regeneron also has strong drugs like Eyelea, for wet age-related macular degeneration, and Praulent for LDL cholesterol lowering, among others, which means it’s not reliant on a single drug to deliver strong earnings. There are also groundbreaking treatments like Dupixent that are delivering positive results and could be additional winners for investors to consider over the years, another reason why this a great biotech stock to consider adding at this time.
Abbott Laboratories (NYSE: ABT)
If you’ve taken a COVID-19 test before, the chances are good that you used one of Abbott Laboratories’ rapid test kits. These tests, which provide a result in 15 minutes, have seen heavy demand throughout the pandemic and continue to drive earnings growth for the company. The diversified health care products company that is focused on nutritional products, diagnostics, generic drugs, and medical devices, should benefit from strong demand for these tests over the long-term even as vaccines continue to get distributed.
Keep in mind that testing will still be needed to help with medical treatment and for travel purposes, which means Abbott Laboratories
could have a strong recurring revenue stream for investors to bank on going forward. The company stated that it shipped over 225 million COVID-19 tests globally in Q3 and just boosted its 2021 outlook, which is another strong reason to consider adding shares. The stock also offers investors a 1.4% dividend yield and is a dividend aristocrat, making it a fantastic pick for income investors.
Before you consider Abbott Laboratories, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Abbott Laboratories wasn't on the list.
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