It is exhausting to maintain observe of all the corporations growing drug candidates, experimental vaccines, and diagnostics checks centered on preventing COVID-19. They embrace a number of giant drugmakers and medical-device makers plus loads of small biotechs and different small healthcare corporations.
Not all the stocks of the publicly traded corporations with COVID-19 packages are nice picks for traders, although. Some are manner too dangerous. Others aren’t as dangerous however do not provide engaging progress prospects. Should you’re in search of the least dangerous solid-growth coronavirus stock to purchase, I believe there’s one which stands above all the remainder: Abbott Laboratories (NYSE:ABT).
Picture supply: Getty Photographs.
Sure, Abbott Labs is 132 years previous. However that does not disqualify the well-established firm from delivering strong progress.
Do not simply take my phrase that Abbott has strong progress potential. The consensus amongst Wall Street analysts is that the healthcare big will be capable of ship double-digit-percentage annual earnings progress over the following 5 years. Add in Abbott’s dividend (which at the moment yields north of 1.4%) and also you’re possible complete returns that ought to handily beat the general market.
What is going on to drive Abbott’s progress over the following few years? A number of merchandise. The corporate markets COVID-19 checks throughout 5 diagnostic platforms. As of July 17, Abbott had shipped greater than 22 million COVID-19 checks. Anticipate continued sturdy demand at the very least by 2021.
Even after the COVID-19 pandemic fades away, the underlying platforms that Abbott’s COVID-19 checks run on ought to generate long-term progress. Abbott’s Alinity household of diagnostic methods, specifically, has been an enormous winner prior to now and continues to have sturdy progress prospects within the U.S. and different main markets.
Abbott’s MitraClip gadget for repairing leaky coronary heart valves is one other key progress driver. The corporate acquired FDA approval on July 15 for a next-generation model of MitraClip. This new model ought to enhance Abbott’s gross sales.
Arguably an important product for Abbott’s progress, although, is the Freestyle Libre steady glucose monitoring (CGM) system. After a prolonged wait, final month the FDA cleared a brand new model of the CGM system that provides integration capabilities with different methods akin to insulin pumps.
You’ll be able to definitely discover different coronavirus stocks that would ship better progress than Abbott Labs. Nonetheless, these stocks can even virtually definitely be lots riskier than Abbott.
For instance, some on the listing will probably be small biotechs with no merchandise but available on the market. If their COVID-19 drug candidates or vaccine candidates flop in medical testing, their share costs will implode. Even massive pharma corporations with coronavirus-focused packages face dangers of failure with their pipeline candidates (and never simply the candidates that concentrate on COVID-19).
Abbott, however, is basically derisked. The corporate is not hoping to launch these merchandise talked about earlier that needs to be progress drivers; they’re all available on the market proper now.
Almost every part about Abbott screams “low threat.” As beforehand famous, the corporate has managed to outlive and thrive for 132 years. Abbott is a Dividend Aristocrat with 48 consecutive years of dividend will increase. It is the worldwide market chief in a number of areas. Abbott ranked on Fortune’s Most Admired Firms listing yearly since 1984 and took the No. 1 spot within the medical merchandise class during the last seven years.
It additionally helps that Abbott’s monetary place stays very sturdy. The corporate’s stability sheet is strong. Abbott raked in $31.9 billion in gross sales final yr with income of greater than $3.1 billion.
However not no-risk
Whereas Abbott is a low-risk stock, it is not a no-risk stock. Such an animal does not exist. Abbott may nonetheless run into issues with merchandise which are at the moment in improvement that would negatively influence its future progress prospects.
As we noticed earlier this yr, Abbott is not resistant to general stock market meltdowns. The healthcare big’s shares fell by practically 32% in the course of the coronavirus-fueled market crash in February and March. Nonetheless, Abbott additionally bounced again greater than many stocks did.
You will not discover a good stock. However among the many stocks of corporations with COVID-19 packages, I do not suppose there’s a greater low-risk, solid-growth stock available on the market proper now than Abbott Labs.