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The healthcare sector has dominated headlines this year thanks to promises from the GOP and the Trump administration related to repealing and replacing Obamacare. With the House passing their reform bill last week, healthcare is sure to remain in the news for some time.
While investors might think that the uncertainty of this reform would bring volatility into the sector, we’ve actually seen healthcare stocks have a pretty decent year so far. In fact, our overall “Medical” sector is up about 7.78% year-to-date, which just edges out the gains of the S&P 500.
Within this broad sector, one of the better performing industries has been what we call “Large Cap Pharmaceuticals.” This industry includes some of the world’s largest and most recognizable drug making companies.
You can check out the full industry data at the industry page here, but it’s certainly worth noting that this group of businesses currently sit in the top 13% of the Zacks Industry Rank and has returned nearly 9% on the year.
We know that our best stocks are going to come from the best industries, so it’s clear that investors should be considering Large Cap Pharma stocks right now. But which companies are standing out? Let’s take a closer look.
Best known for its flagship product, Bayer Aspirin, Bayer AG is one of the world’s largest manufacturers of healthcare products. From consumer health products like Aspirin and Aleve to pharmaceuticals and animal health treatments, this German giant does a little bit of everything.
In its most recent earnings report, Bayer posted earnings of $2.80 per share and revenue of $14.1 billion, beating the respective Zacks Consensus Estimates of $2.40 and $13.7 billion. Its impressive P/E ratio of 14.41 and P/S ratio of 1.86 both come in below the industry average and have helped earn the stock an “A” grade for Value. The stock’s overall VGM score of “B” also pairs well with its Zacks Rank #1 (Strong Buy).
Merck and Co. is a research-driven pharmaceutical company that has established itself as a global leader in the discovery and development of vaccines and disease therapies. The company currently makes noteworthy treatments or vaccines for HPV, type 2 diabetes, cancer, and HIV, among others.
In its latest report, Merck and Co. reported earnings of 88 cents per share and revenue of $9.4 billion. These results surpassed our Zacks Consensus Estimates of 83 cents and $9.3 billion. Over the past 60 days, we have seen four positive revisions for the company’s full-year and next-year earnings, lifting the stock to a Zacks Rank #2 (Buy). On top of this, MRK currently has a “B” grade for Value.
3. H. Lundbeck
H. Lundbeck is an international pharmaceutical company engaged in the research, development, and sale of pharmaceuticals around the world. The company currently has products that target disorders like depression and anxiety, schizophrenia, insomnia, Huntington's, epilepsies, Alzheimer's and Parkinson's diseases.
Just today, H. Lundbeck reported quarterly revenue growth of 12% to $622 million, surpassing our consensus estimate of $591 million. The company also upped its full-year revenue and earnings guidance. Shares popped nearly 3% following the release of the report. The stock, now hovering near its 52-week high, could be on the verge of breaking into a new range if its projections are correct. HLUYY does also have an “A” grade for Growth.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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3 Large Cap Drug Stocks to Buy Now
The healthcare sector has dominated headlines this year thanks to promises from the GOP and the Trump administration related to repealing and replacing Obamacare. With the House passing their reform bill last week, healthcare is sure to remain in the news for some time.
While investors might think that the uncertainty of this reform would bring volatility into the sector, we’ve actually seen healthcare stocks have a pretty decent year so far. In fact, our overall “Medical” sector is up about 7.78% year-to-date, which just edges out the gains of the S&P 500.
Within this broad sector, one of the better performing industries has been what we call “Large Cap Pharmaceuticals.” This industry includes some of the world’s largest and most recognizable drug making companies.
You can check out the full industry data at the industry page here, but it’s certainly worth noting that this group of businesses currently sit in the top 13% of the Zacks Industry Rank and has returned nearly 9% on the year.
We know that our best stocks are going to come from the best industries, so it’s clear that investors should be considering Large Cap Pharma stocks right now. But which companies are standing out? Let’s take a closer look.
1. Bayer AG (BAYRY - Free Report)
Best known for its flagship product, Bayer Aspirin, Bayer AG is one of the world’s largest manufacturers of healthcare products. From consumer health products like Aspirin and Aleve to pharmaceuticals and animal health treatments, this German giant does a little bit of everything.
In its most recent earnings report, Bayer posted earnings of $2.80 per share and revenue of $14.1 billion, beating the respective Zacks Consensus Estimates of $2.40 and $13.7 billion. Its impressive P/E ratio of 14.41 and P/S ratio of 1.86 both come in below the industry average and have helped earn the stock an “A” grade for Value. The stock’s overall VGM score of “B” also pairs well with its Zacks Rank #1 (Strong Buy).
2. Merck and Company (MRK - Free Report)
Merck and Co. is a research-driven pharmaceutical company that has established itself as a global leader in the discovery and development of vaccines and disease therapies. The company currently makes noteworthy treatments or vaccines for HPV, type 2 diabetes, cancer, and HIV, among others.
In its latest report, Merck and Co. reported earnings of 88 cents per share and revenue of $9.4 billion. These results surpassed our Zacks Consensus Estimates of 83 cents and $9.3 billion. Over the past 60 days, we have seen four positive revisions for the company’s full-year and next-year earnings, lifting the stock to a Zacks Rank #2 (Buy). On top of this, MRK currently has a “B” grade for Value.
3. H. Lundbeck
H. Lundbeck is an international pharmaceutical company engaged in the research, development, and sale of pharmaceuticals around the world. The company currently has products that target disorders like depression and anxiety, schizophrenia, insomnia, Huntington's, epilepsies, Alzheimer's and Parkinson's diseases.
Just today, H. Lundbeck reported quarterly revenue growth of 12% to $622 million, surpassing our consensus estimate of $591 million. The company also upped its full-year revenue and earnings guidance. Shares popped nearly 3% following the release of the report. The stock, now hovering near its 52-week high, could be on the verge of breaking into a new range if its projections are correct. HLUYY does also have an “A” grade for Growth.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>