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What are US Pharma Stocks?

The US Pharmaceutical company stocks comprises companies that are into research, development, manufacturing and selling drugs and disease treatments. The sector has gained attention since the onset of the pandemic. The pharmaceutical companies were looking for ways to solve the global problem of COVID-19. They have witnessed a surge in their sales after getting approvals for COVID-19 vaccinations.

Some popular names in the Pharma sector are Pfizer, Johnson & Johnson, Novartis AG, Abbott Laboratories, and United Health Group.

Best U.S. Pharmaceutical Company Stocks To Buy Now in 2024

1) Eli Lilly and Company (LLY)

Founded in 1876 and has its headquarters in Indianapolis, Indiana, Eli Lilly is a global pharmaceutical company with a long history of innovation. They develop, manufacture, and market prescription drugs, focusing on areas like diabetes (Trulicity), oncology (Alimta), and animal health. Eli Lilly is committed to research and development, investing heavily in bringing new medicines to patients worldwide.

  • Marketcap: 790.50B
  • EPS: 6.82
  • PE Ratio: 121.96
  • Price/Book: 61.70
  • Forward Dividend Yield: 5.20 (0.63%)
  • Profit Margin: 17.08%
  • Operating Margin: 31.20%

2) UnitedHealth Group Inc. (UNH)

Established in 1974 and headquartered in Minnetonka, Minnesota, UnitedHealth Group is a leading diversified healthcare company. They operate a variety of health insurance plans for individuals and employers, including UnitedHealthcare, Optum, and AARP Medicare Supplement. UnitedHealth Group also provides healthcare services through their OptumCare network of clinics and hospitals.

  • Marketcap: 463.06B
  • EPS: 16.40
  • PE Ratio: 30.68
  • Price/Book: 5.34
  • Forward Dividend Yield: 7.52 (1.49%)
  • Profit Margin: 4.05%
  • Operating Margin: 7.95%

3) Johnson & Johnson (JNJ)

Founded in 1886 with headquarters in New Brunswick, New Jersey, Johnson & Johnson is a healthcare titan with a diversified portfolio. They manufacture and sell pharmaceutical drugs (Remicade for arthritis), medical devices (surgical instruments, contact lenses), and consumer healthcare products (Band-Aid bandages, Tylenol pain medication). Their research and development is a major focus, driving innovation across the healthcare spectrum.

  • Marketcap: 351.32B
  • EPS: 6.72
  • PE Ratio: 21.72
  • Price/Book: 5.08
  • Forward Dividend Yield: 4.96 (3.36%)
  • Profit Margin: 44.92%
  • Operating Margin: 29.51%

4) Merck & Co. Inc. (MRK)

Established in 1891 and headquartered in Kenilworth, New Jersey, Merck is a global pharmaceutical company with a strong focus on research and development. They manufacture and market prescription drugs, vaccines (Gardasil for HPV), and animal health products. Merck is known for its blockbuster drugs like Keytruda for cancer treatment and Januvia for diabetes.

  • Marketcap: 327.87B
  • EPS: 0.91
  • PE Ratio: 142.25
  • Price/Book: 8.12
  • Forward Dividend Yield: 3.08 (2.38%)
  • Profit Margin: 3.76%
  • Operating Margin: 42.47%

5) AbbVie Inc. (ABBV)

Founded in 2013 and has its headquarters in North Chicago, Illinois, AbbVie is a research-based biopharmaceutical company. They develop and market innovative drugs for immunology (Humira for rheumatoid arthritis), oncology (Imbruvica for leukemia), and other therapeutic areas. AbbVie was spun off from Abbott Laboratories and has become a major player in the biopharmaceutical industry.

  • Marketcap: 292.14B
  • EPS: 3.36
  • PE Ratio: 49.24
  • Price/Book: 36.49
  • Forward Dividend Yield: 6.20 (3.75%)
  • Profit Margin: 11.02%
  • Operating Margin: 28.29%

6) Thermo Fisher Scientific Inc. (TMO)

Established in 1956 and with its headquarters in Waltham, Massachusetts, Thermo Fisher is a leading scientific instrument company serving the healthcare, life sciences, and environmental sectors. They manufacture a wide range of instruments and consumables used in research, diagnostics, and industrial applications. Thermo Fisher also provides services like contract research and bioprocessing solutions.

  • Marketcap: 219.59B
  • EPS: 15.59
  • PE Ratio: 36.90
  • Price/Book: 4.82
  • Forward Dividend Yield: 1.56 (0.27%)
  • Profit Margin: 14.20%
  • Operating Margin: 16.67%

7) Pfizer Inc. (PFE)

Founded in 1849 and has its headquarters in New York City, Pfizer is a leading global pharmaceutical company with a rich history of innovation. They develop and manufacture a wide range of prescription drugs and vaccines, including the highly successful COVID-19 vaccine Comirnaty. Pfizer focuses on areas like oncology (Ibrance for breast cancer), internal medicine (Xeljanz for arthritis), and vaccines for various diseases.

  • Marketcap: 167.44B
  • EPS: -0.05
  • PE Ratio: N.A.
  • Price/Book: 1.81
  • Forward Dividend Yield: 1.68 (5.69%)
  • Profit Margin: -0.56%
  • Operating Margin: 31.63%

8) Abbott Laboratories (ABT)

Established in 1888 and has its headquarters in Abbott Park, Illinois, Abbott Laboratories is a diversified healthcare company with a global presence. They develop, manufacture, and sell a broad range of medical devices (cardiac stents, glucose monitors), diagnostics (pregnancy tests), and nutritional products (Ensure for adults). Abbott Laboratories is a major player in the healthcare industry, serving patients and healthcare providers worldwide.

  • Marketcap: 179.58B
  • EPS: 3.21
  • PE Ratio: 32.16
  • Price/Book: 4.63
  • Forward Dividend Yield: 2.20 (2.13%)
  • Profit Margin: 13.96%
  • Operating Margin: 15.40%

9) Amgen Inc. (AMGN)

Founded in 1981 and headquartered in Thousand Oaks, California, Amgen is a leading biotechnology company pioneering the development of innovative drugs. They specialize in biopharmaceutical products, including blockbuster drugs like Enbrel for rheumatoid arthritis and Prolia for osteoporosis. Amgen is a major force in the biopharmaceutical industry, focusing on research and development to bring new treatment options to patients.

  • Marketcap: 164.88B
  • EPS: 7.01
  • PE Ratio: 43.85
  • Price/Book: 32.83
  • Forward Dividend Yield: 9.00 (2.93%)
  • Profit Margin: 12.74%
  • Operating Margin: 13.33%

10) Elevance Health Inc. (ELV)

Established in 2023 through the merger of Anthem and Elevance Health, this company is a leading health insurance provider in the United States. They offer a variety of health insurance plans for individuals, families, and employers under the Anthem and Empire BlueCross BlueShield brands. Elevance Health has a significant presence across the U.S., serving millions of customers through their insurance plans.

  • Marketcap: 124.50B
  • EPS: 26.51
  • PE Ratio: 20.37
  • Price/Book: 3.09
  • Forward Dividend Yield: 6.52 (1.21%)
  • Profit Margin: 3.64%
  • Operating Margin: 7.52%

Who Should Invest in US Pharma Stocks?

Investors who understand how the sector works and are confident about the sector’s growth can invest in US Pharmaceutical company stocks.

Even though Pharma companies are volatile, they can be good investments in the long term. With the size of the industry growing and healthcare becoming more important, the pharma sector can be a good investment. Also, because Pharma is an ever-evolving industry, innovation, scientific breakthroughs, and technological advancements are inevitable. These advances help the Pharma companies grow at a very fast rate.

Therefore, pick fundamentally strong stocks with a good track record. Also, closely track your investments to avoid adverse impacts of market volatility.

Pharmaceutical Sector Outlook in the US

Pharma and healthcare sectors are among the industries that are more or less stable. People will continue spending money on medicines and health care, irrespective of inflation and the job market.

Even though the sector was at its peak during the pandemic, a slight correction may be inevitable. However, experts are optimistic about the pharmaceutical sector for investments.

Furthermore, post-Covid-19, pharmaceutical and biotech companies are actively seeking to adapt to artificial intelligence and robotics to improve drug discovery and research. Therefore, the pharmaceutical sector outlook is promising for the medium to long-term investment horizon.