A lot has happened in the investment world over the past six months. We have witnessed an epic short squeeze, a dip and continued gains in cryptocurrencies, a meme stock soar, and more. All this time, the market has been unstable, and fears that we are heading for another crisis still exist.
For all the turmoil in the markets, it’s important to remember one of the golden rules of investing: Buying and owning stocks in great companies over a long period of time tends to be profitable. Of course, no one knows what awaits us in the second half of the year, but whatever happens, here are two great companies to buy and hold for the next six months or longer: Eli Lilly (NYSE: LLY) and Pfizer (NYSE: PFE).
1. Eli Lilly
Pharmaceutical giant Eli Lilly boasts a great product line. One of the company’s most exciting projects is Tirzepatide, a diabetes and obesity drug currently in phase 3 clinical trials. Research firm EvaluatePharma ranks Thirsepatide as the most valuable project in the pharmaceutical industry (worth $ 7.8 billion).
Another promising program Eli Lilly is working on is Donanemab, a potential treatment for Alzheimer’s disease (AD). Donanemab works by reducing the level of amyloid plaques in the brains of AD patients, which, according to some experts, is one of the main causes of the disease. The same principle is behind the work of the recently approved Aduhelm from Biogen. This partly explains the fact that Eli Lilly’s stock skyrocketed after Aduhelm’s approval.
Donanemab, recently awarded Breakthrough Therapy status by the US Food and Drug Administration (FDA), has been shown to be effective in Phase 2 clinical trials and may soon receive the green light from regulatory agencies, thus adding another growth factor for Eli Lilly shares.
In addition, the company is developing a product called Basal Insulin Fc (BIF), which allows diabetics to take insulin once a week. Given that patients with type 2 diabetes are forced to take insulin on a daily basis, BIF can make a big difference to them. Now there are already positive results in the 2nd phase of clinical trials of this drug.
Also worth mentioning is Lilly’s current product line. During the first quarter of 2021, the company’s revenue grew 16% year on year to $ 6.9 billion. One of its top-selling products was its diabetes drug Trulicity, which grew 18% year over year to $ 1.5 billion. Revenue in the first quarter also increased significantly due to the sale of drugs (vaccines, antibodies) for COVID-19.
For all that, Eli Lilly will still be in an excellent position after the “tailwind” associated with the coronavirus has subsided. The current composition of the company and its portfolio allow it to provide stable financial results from year to year. This is why, despite the market’s ups and downs, investors can expect this pharmaceutical company to continue to rally in the long term.
The BNT162b2 coronavirus vaccine (manufactured by Pfizer) helped boost the company’s first-quarter financials with $ 3.5 billion in sales. The company reported total revenue of $ 14.6 billion, up 42% from the previous quarter. These staggering revenue growth sets Pfizer apart from the established pharmaceutical giants.
The company will continue to benefit enormously from the vaccine co-developed with the German company BioNTech. In May, it was announced that the FDA had granted emergency use of the BNT162b2 vaccine for patients between the ages of 12 and 15 (the first in the United States). The pharmaceutical giant expects to see a record $ 26 billion in revenue from BNT162b2 this year (more than half of the company’s full fiscal 2020 revenue).
Even excluding sales of the coronavirus vaccine, Pfizer’s first-quarter revenue grew 8% year-over-year (reaching $ 11.1 billion). The company’s product line includes the anticoagulant Eliquis, which had sales of $ 1.6 billion in the first quarter, up 26% from a year earlier.
In addition, Pfizer conducts dozens of clinical trials and regularly adds new revenue streams to its already rich portfolio. Finally, the company offers a 3.9% dividend yield, which is impressive compared to the S&P 500’s 1.37% yield. With that said, Pfizer shares look like a great buy in the long term as well.
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