Unpredictability has been the hallmark of 2020 and novel coronavirus stocks were in limbo this year as the markets moved up and down with the news cycle. In what seems like a light at the end of a dark tunnel, news of the vaccine’s approval shows promise of a return to normal life. While this in no way means that the pandemic is over, we are definitely one step closer.
A vaccination campaign to inoculate the masses is an arduous task, to say the least. While developing an immunization for the virus is key, a vaccine without vials and needles is just a formula, as Samanth Subramanian wrote in this Bloomberg article. This means that investors looking to buy pandemic-winner stocks should consider looking beyond the biotech firms that create the formula.
Companies that produce the tools for vaccine development and storage play an equally important role in making mass vaccination possible. Given the scale of the vaccine rollout in 2021, these stocks have a good chance of coming out on top:
- Pfizer (NYSE:PFE)
- Moderna (NASDAQ:MRNA)
- Thermo Fisher Scientific (NYSE:TMO)
- Johnson and Johnson (NYSE:JNJ)
- Becton Dickinson and Co. (NYSE:BDX)
- Avantor (NYSE:AVTR)
- West Pharmaceuticals Services (NYSE:WST)
Coronavirus Stocks: Pfizer (PFE)
I’m going to kick off this list with the main actor in the pandemic saga – Pfizer. The company was the first to receive approval from drug authorities for the mass rollout of its vaccine. The formula is said to be 90% effective in combatting the coronavirus. This is an impressive number as far as vaccines go. In just the first week of getting the go-ahead, nearly 550,000 people were injected with Pfizer’s vaccine.
As we look toward the future, Pfizer will be able to keep its revenue streams flowing. The company has a deal with the U.S. Government to supply a total of 200 million doses bringing its revenue total to $3.9 billion. If secondary doses are required in the future, this number will go higher. The EU has ordered 200 million doses for its member states.
In addition to its Covid-19 vaccine revenue, the company has the potential for greater gains from the sale of consumer drugs. In 2019, Pfizer reported revenue of $51.8 billion from drug sales. This is one of the top coronavirus stocks in 2021.
Second on this list, ironically, is the company that was next in line to produce a successful vaccine candidate against the virus. Moderna’s vaccine, the mRNA-1273, posted 94% effectiveness during trials. Like Pfizer, Moderna also has multiple supply deals with the U.S. and nations across the globe. The company promised to deliver 20 million doses in 2020 and 500 million to 1 billion doses by 2021. Even if it sells just 500 million doses, this will result in revenue of a whopping $12.5 billion.
Adding to this Covid vaccine cash flow, the biotech firm’s mRNA technology will aid in the development of future vaccines. This will help the company generate revenue from its other treatments. Moderna has 21 clinical trials in development right now. This could bolster the company’s revenue numbers in the coming years.
If you are looking for high-growth coronavirus stocks to invest in, Moderna is a great bet right now.
Coronavirus Stocks: Thermo Fisher Scientific (TMO)
Next on the list is a stock that is not directly involved in the development of a vaccine but plays a huge role in its distribution. Thermo Fisher Scientific manufactures ultra-cold freezers that store the vaccines during its rollout. It’s a small company with a big mission. The firm’s products aren’t just limited to freezers but include lab equipment and life science re-agents.
Thermo Fisher is a great pandemic play for investors who are looking to diversify their investments outside biotech firms. The company’s earnings growth is currently 15.3% but is expected to go as high as 50.6% in 2021. This is far above the industry average of 10.3% according to Yahoo Finance. The stock is currently trading around $476, which is a bargain given its potential for growth.
As far as coronavirus stocks go, Thermo Fisher’s significant role in the storage of the vaccine will be a huge tailwind for the company. Management estimates that its total revenue from the vaccine rollout will be $1.75 billion.
Johnson and Johnson (JNJ)
Another company that was tapped to produce a vaccine is Johnson and Johnson. While Moderna used its mRNA technology, J&J uses JNJ-78436735. However, its efficacy against the virus will only be determined after the start of 2021. Despite the uncertainty of the vaccine, many investors are willing to bet on the stock as vaccine sales are expected to bring in $3 billion. The coronavirus stock is down 15% for the year but its potential for growth makes it a strong buy.
Adding to its Covid vaccine sales, J&J continues to see robust demand for its drugs like Stelara, Darzalex and Imbruvica. Revenue from sales will add to its bottom line next year. The company also has 90 ongoing clinical-stage programs with 27 in late-stage testing.
Finally, the cherry on top of the cake is Johnson and Johnson’s dividend. The company is referred to as a dividend aristocrat for its dividend increase over 60 consecutive years. J&J’s opportunities for growth and high dividend make an investment in this stock a no-brainer.
Coronavirus Stocks: Becton Dickinson and Co. (BDX)
A vaccine wouldn’t exist without a syringe and this is where Becton Dickinson and Co.’s role comes into play. The company is the largest manufacturer of injection devices with a presence in the U.S., Europe and Asia. With the rollout of the Covid vaccine, the company plans to invest $1.2 billion to manufacture the syringes. Not only will this help them meet demand but it will also help them develop advanced technology for pre-filled syringes.
In addition to its syringes, the company is also developing a portable Covid-19 test which can be taken at home. According to Yahoo Finance, Becton Dickinson earned $440 million from the sale of the tests in the fourth quarter. The company estimates this value will spike to $1.5 billion in 2021. Investors are also increasingly bullish on BD stock for its dividend. The firm is has sustained a consecutive dividend increase for the last 48 years.
Becton Dixon will see a strong rally in 2021 and at a price of $249.30, this coronavirus stock is a steal.
Avantor’s role in supporting the rollout of the Covid-19 vaccine put this stock on investors’ watch list. The company manufactures a number of materials, instruments and equipment for medical, biotech and pharmaceutical companies. This year it was tapped to supply vaccine developers with the materials required, including cold-freezers for vaccine storage.
The revenue from sales will be a huge tailwind for the company in 2021. As a result, Avantor’s stock rose more than 40% in 2020.
Another growth catalyst for coronavirus stocks like this one is its position in emerging markets. According to The Motley Fool, the aging population in its target market puts the company in a great position to benefit from increased sales. With a huge runway of growth in 2021 and a market capitalization of $15.56 billion, Avantor is a stock that’s hard to miss.
Coronavirus Stocks: West Pharmaceuticals Services (WST)
West Pharmaceuticals is a vaccine complementary stock that shows some major potential for growth. The company manufactures the rubber stops used in vaccine packaging, vials and pre-filled syringes, among other products. As governments increase their vaccine orders, WST stock is in for some major gains in 2021.
Many investors consider WST to be a good play because the company posted steady growth the last couple of years. The Covid vaccine rally resulted in $548 million in sales in its third-quarter. Sales were also up 14% at $1.56 billion. Bank of America estimates West Pharmaceuticals’ total profits will increase by 15% to $242 million in 2021.
Although sales for its non-coronavirus products are down for the year, management anticipates a rebound in 2021. This coronavirus stock is a smart vaccine rally investment in the new year.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.