The 2 Best Pharma Stocks To Buy On Dips

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Because the COVID-19 pandemic is under control in most major economies, the hype surrounding vaccine producers is gradually tapering off. However, because the population of much of the world, including the United States, is aging, the demand for pharmaceutical products is on the rise. An increasing patient pool with various chronic diseases, and continued treatment innovations for critical diseases, should keep driving the industry’s growth this year and beyond. According to a report by Research and Markets, the global pharmaceuticals market is expected to grow at an 8% CAGR from 2021 – 2025.

Investors’ interest in the pharmaceutical space is evident in the SPDR S&P Pharmaceuticals ETF’s (XPH) 4.6% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 1.3% gains over this period.

With these factors in mind, we think it could be wise to bet on the shares of established pharmaceutical companies Johnson & Johnson (JNJ) and Pfizer Inc. (PFE). They have significant market dominance and are innovating at a rapid pace. But while these stocks are still trading at high prices, one should seek to buy them on every dip.

Johnson & Johnson (JNJ)

One of the top players in the healthcare space, JNJ researches, develops, manufactures and sells a range of products in the healthcare field worldwide. It operates through three segments: consumer health, pharmaceutical, and medical devices, and is especially known for its baby care products.

The company announced on May 6 that the FDA had approved TECNIS Synergy and TECNIS Synergy Toric II IOLs, and that Health Canada also approved TECNIS Synergy Toric II IOLs. Because the product enables surgeons to address astigmatism during surgery, it could see increasing demand for it in the coming months.

JNJ’s sales increased 7.9% year-over-year to $22.32 billion for its fiscal first quarter, ended March 31, 2021. Its gross profit grew 12% year-over-year to $15.26 billion, while its adjusted net earnings increased 12.5% year-over-year to $6.90 billion. Also, JNJ’s adjusted EPS increased 12.6% year-over-year to $2.59.

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