7 of the Top-Rated Pharmaceutical Stocks for Q1

pharmaceutical stocks - 7 of the Top-Rated Pharmaceutical Stocks for Q1

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Pharmaceutical stocks haven’t really had much since the pandemic hit. Most of the talk has been about the companies in a race for vaccines or treatments and the companies that are distributing vaccines and treatments.

That hasn’t left a lot of space for other discussions. But that’s human nature, especially when a massive challenge like a global pandemic hits and the global economy seizes.

With the Omicron variant still raging, we’re almost two years out from the beginning of this health challenge. Fortunately, viruses usually have a virulent beginning and over time mutate into more livable inconveniences.

This is the ideal time to refocus on my top-rated pharmaceutical stocks. They’re reasonably priced and still offer great growth opportunities as we enter a new stage of the market.

  • AbbVie (NYSE:ABBV)
  • Catalyst Pharmaceuticals (NASDAQ:CPRX)
  • Horizon Therapeutics (NASDAQ:HZNP)
  • Innoviva (NASDAQ:INVA)
  • Eli Lilly (NYSE:LLY)
  • Pfizer (NYSE:PFE)
  • Zoetis (NYSE:ZTS)

Pharmaceutical Stocks to Buy: AbbVie (ABBV)

abbvie (ABBV) website and logo on mobile phone
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Last year, ABBV’s Humira was the no. 1 prescribed pharmaceutical in the world, generating $20 billion in revenue. And that kind of revenue has been flowing for over a decade now.

That’s a very impressive record and it has made ABBV one of the top pharmaceutical stocks in the world. What’s more, that kind of money is very helpful in generating the kind of money that helps grow a diverse and exciting pipeline of other drugs.

ABBV focuses on autoimmune-related diseases, of which most are chronic issues. That means managing a disease over long periods of time. And that means long-term revenue streams.

ABBV stock rose over 20% in the past 12 months. It also has a 4.15% dividend, which is a nice kicker for reinvesting dividends for the long haul.

This stock has a B rating in my Portfolio Grader.

Catalyst Pharmaceuticals (CPRX)

A magnifying glass zooms in on the website of Catalyst Pharmaceuticals (CPRX).
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Where ABBV has a market cap around $242 billion, CPRX has a market cap of just $616 million. It’s not one of the big pharmaceutical stocks, to say the least.

But it also has a very specific market and a go-to drug for patients with rare neurological diseases. It’s a niche few others have tried to enter, which makes CPRX a significant player in the space.

It has a partner that is also looking to move the drug into markets beyond US shores, which could be very lucrative. And as its drug Firdapse heads toward its patent cliff, CPRX is already developing a new and improved version to keep its primacy in the sector.

CPRX stock has gained nearly 80% in the past 12 months yet it still has a forward price-to-earnings (P/E) around 14. This a long-term choice for its growth potential or possible sale to a big pharma at a premium.

This stock has an A rating in my Portfolio Grader.

Pharmaceutical Stocks to Buy: Horizon Therapeutics (HZNP)

a scientist with protective equipment and microscope in a lab
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Moving into its second decade, HZNP is an Ireland-based pharmaceutical firm with a $20 billion market cap that has a number of drugs in the market and a healthy pipeline. It focuses on the orphan and rheumatology treatment areas.

While located in Ireland, HZNP does almost all its business in the U.S., with a few drugs also available outside the U.S. The sectors it focuses on allow it to explore therapies that don’t have much – or any – competition, which makes it a sure bet in its fields. Pricing drugs for orphan diseases have more elasticity as well, another benefit for HZNP.

HZNP stock is up 13% in the past 12 months, and it has a very strong pipeline that makes it very attractive for the long term.

This stock has a B rating in my Portfolio Grader.

Innoviva (INVA)

colorful pills and vials sitting on a table
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Wouldn’t it be nice if someone came into your house and found all the things you’ve forgotten about over the years, package and sell them to people that actually want them, and then split the profits with you?

Essentially that’s the business INVA is in with pharmaceutical companies. It finds drugs that are sitting in the back of these pharmaceutical stocks’ closets and repackages them to sell. It then gives its pharma clients a cut of the proceeds.

It’s an interesting model, and INVA has been doing it since the mid-1990s, so it’s good at what it does.

It’s a small company, with a $1 billion market cap. However, its services are gaining attention. INVA stock is up 32% in the past 12 months, yet it trades at a P/E of less than 6.

This stock has an A rating in my Portfolio Grader.

Pharmaceutical Stocks to Buy: Eli Lilly (LLY)

Eli Lilly logo outside of the company's corporate office
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One of the bluest of the blue chip pharmaceutical stocks is LLY. It has been around since 1876 and has a market cap that rivals ABBV. It’s in some rarified air to be sure.

In 1923, LLY marketed Iletin, the first commercially available insulin product. LLY continues to be a leader in diabetes medicines with its current top seller, Trulicity.

It was also the first company to produce and distribute Dr. Jonas Salk’s polio vaccine. Humulin, Prozac, Cymbalta, Zyprexa and many other drugs make up its massive portfolio.

LLY stock has gained 28% in the past 12 months, but has slid slightly in 2022. It’s a bit expensive now, but it will certainly see more investor interest as tech stocks and vaccine stocks lose their allure for solid long-term growth stocks with solid earnings.

This stock has an A rating in my Portfolio Grader.

Pfizer (PFE)

Pfizer (PFE) logo on Pfizer building. Pfizer is an American pharmaceutical corporation.
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PFE is even older than LLY, starting in 1849, and I think it’s fair to say most people in the world know at least one product PFE makes these days.

But it’s first big achievement was manufacturing citric acid and ascorbic acid (vitamin C) from sugar. That technological achievement had a massive impact on the citric acid market, which is still used widely as a preservative.

By the 1940s it was the leading producer of penicillin for use during WWII. A decade later, it was producing Terramycin, a broad-based antibiotic. And of course by the turn of the century PFE launched Viagra. And there have been plenty of drugs before and since.

PFE stock meanwhile has had quite a year with plenty more to go. The stock has gained 50% in the past 12 months, yet it trades at a P/E of just below 16, and has a nearly 3% dividend to boot.

This stock has an A rating in my Portfolio Grader.

Pharmaceutical Stocks to Buy: Zoetis (ZTS)

Zoetis (ZTS) sign outside the company's headquarters
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While many people immediately think of pharmaceutical stocks being all about humans, the fact is there’s a huge market for pharmaceuticals for companion pets, as well as livestock.

PFE actually has a significant division dedicated to animal health. It’s also a good way to test drugs for human use or multiple uses as well. But ZTS specializes in animal health medicines and vaccines.

You may recall that in 2019, one of the big stories was about the spread of African Swine Flu to pig farms, particularly in China. It was a massive economic issue in China, as well as globally. ZTS was already developing a vaccine.

And given the increasing frequency of diseases crossing from birds, pigs and other animals to humans, keeping healthy animals around us is vital to our physical and economic health. ZTS is one of the top animal health pharmaceutical stocks in the world and its products are in rising demand.

ZTS stock has gained 28% in the past year, and that’s after losing 16% year-to-date. It’s a bit expensive here, but earnings will certainly catch up when the global economy revs up again.

This stock has a B rating in my Portfolio Grader.

On the date of publication, Louis Navellier had long positions in ABBV, HZNP and ZTS.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. 

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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