Pharmaceutical stocks to watch
The pharmaceutical industry belongs to the wider healthcare sector. Investing in hot pharmaceutical stocks is a popular trend in times of political or economic instability, as these healthcare companies provide business all year long, no matter the global situation. For example, given the COVID-19 crisis, pharmaceutical companies have been in high demand for providing products and equipment, in turn increasing their share price and value simultaneously.
This article contains a list of global pharmaceutical shares with some of the highest market capitalisations, dividend yield percentages and overall stock value, according to stock market indices such as the FTSE 100.
Pharmaceutical stock indices tend to contain mainly blue-chip companies that have proven their value throughout years of business expansion and economic sufferings. However, our platform offers spread betting and CFD trading on both blue-chip stocks and pharma penny stocks.
Pharmaceutical share tips
Share prices tend to represent the perceived value of a company by investors, and any subsequent profit and loss that may result after opening a trade. In order to value pharma stocks, it is important to analyse company fundamentals, which are internal and external factors that may influence the performance of the business. This is part of fundamental analysis, which most traders will undertake before opening a position in the long-term, though less often in the short-term. Price-to-earnings (P/E) ratios help to value a company’s share against its competitors.
Pharmaceutical stock investors look for growth and earnings potential and often prefer high-yield stocks, as this means that the company likely pays consistent dividends. Paying dividends to investors can help to strengthen loyalty and reliance in their beliefs that the company will succeed and that they will continue to receive payouts.
Total return is also a good indicator of healthcare stock performance. It shows the return rate of an investment over a period of time, measured by interest, capital gains and dividend statistics. These aspects can all be used to measure the value of top pharmaceutical stocks.
Pharma penny stocks
In recent years, biotech and pharmaceutical penny stocks have become a particular interest to investors as they have often grown into widespread and multinational corporations, including Novavax and GW Pharmaceuticals. Penny stocks in the pharma sector have become especially popular throughout the COVID-19 pandemic, as many small businesses are racing to the challenge of developing a coronavirus vaccine, in competition with their rival giants.
Top pharma stocks
GlaxoSmithKline
GSK is a global pharmaceutical company that is involved in the manufacturing and marketing of vaccines, medicines and other healthcare-related products, headquartered in London. The wide range of operations make it a relatively reliable pharma stock and helps to diversify a trader’s risk portfolio, as well as amplifying GSK’s share price. Relatively low-risk stocks tend to appeal to long-term investors; for this reason, it is considered one of the most popular UK pharma stocks right now.
Market capitalisation: $105 billion
Dividend yield: 4.42%
P/E ratio: 15.43
AstraZeneca
AstraZeneca conducts its research and development in three global regions: Cambridge, UK, Maryland, USA and Mölndal, Sweden. It is one of the most advanced developers of prescription medicine for cardiovascular, respiratory and autoimmunity purposes. It is one of the fastest-growing top pharma stocks for 2020 due to the pandemic, leading Astrazeneca’s share price to rise within recent months.
Market capitalisation: $142 billion
Dividend yield: 3.40%
P/E ratio: 91.7
Gilead Sciences
Gilead is an American biopharmaceutical company that focuses on producing antiviral solutions for illnesses that are often overlooked by other healthcare companies. This includes treatment for HIV, liver disease and other inflammatory diseases that are similar to influenza. It is a primary candidate in the run for a COVID-19 vaccine, and the news caused Gilead’s stock price to shoot up by 5% over a matter of days.
Market capitalisation: $94.5 billion
Dividend yield: 3.71%
P/E ratio: 19.37
AbbVie
AbbVie is a spin-off of Abbott Laboratories, dedicated to treating chronic autoimmune diseases on a global level, including blood cancers, Parkinson’s and Crohn’s disease. In June 2019, it acquired Allergan PLC, another biopharmaceutical company from Ireland, whose combined revenue has led to a massive expansion of the company. In turn, this has increased AbbVie’s share price. Furthermore, it pays consistent dividends to investors that are of a high percentage.
Market capitalisation: $136 billion
Dividend yield: 5.18%
P/E ratio: 16.27
Novavax
Novavax is an American vaccine developer for autoimmune diseases. In comparison with the blue-chip stocks in this list, Novavax is a small-cap pharma stock and has a newer and therefore smaller presence in the healthcare market. Although it does not pay out dividends, it has shown fast-paced developments in clinical testing for the Coronavirus vaccine, helping the company value and Novavax’s stock price to double since the start of 2020.
Market capitalisation: $2.58 billion
Dividend yield: N/A
P/E ratio: N/A
Pfizer
Pfizer is one of the world’s largest pharmaceutical companies, headquartered in New York City. It was founded in 1849 and Pfizer’s share price has been featured on the Dow Jones Industrial Average stock index since 2004, setting a standard for rising pharma stocks. Pfizer develops and distributes medicines and vaccines worldwide, for inflammatory and immunology diseases, as well as rare diseases. This blue-chip stock provides consistent dividends and opportunities for company growth and revenue, making it one of the most popular biotech stocks among traders.
Market capitalisation: $200 billion
Dividend yield: 4.20%
P/E ratio: 12.85
GW Pharmaceuticals
GW is a British pharmaceutical company that is best known for its treatment for multiple sclerosis, which included medicinal cannabis. It was the first natural cannabis plant derivative to gain market approval across the globe. Its contribution to world leading developments in science means that GW Pharmaceuticals’ stock price is of a high value.
Market capitalisation: $3.92 billion
Dividend yield: N/A
P/E ratio: 129.46
Sanofi
Sanofi is seen as a relatively safe bet in the world of healthcare stocks. It is a Paris-based pharmaceutical company that focuses on therapeutics, most notably for multiple sclerosis, various cancers and arthritis. It is the world’s fifth largest pharmaceutical company in terms of prescription sales from selling a wide range of over-the-counter drugs to consumers. This makes investing in Sanofi stocks a very appealing choice for investors.
Market capitalisation: $125 billion
Dividend yield: 2.35%
P/E ratio: 15.94%
Novartis
Novartis has its headquarters in Basel, Switzerland. It is one of the world’s largest pharmaceutical companies based on market capitalisation, along with Pfizer. Its main purpose is to generate prescription medicines on a global basis for immunology, dermatology and respiratory purposes. Novartis boasts a high-value share price, although it follows the European practice of only paying dividends to investors once a year, instead of on a quarterly basis. This may deter investors that are looking for more frequent payouts.
Market capitalisation: $196 billion
Dividend yield: 2.32%
P/E ratio: 16.33
Moderna
Investing in Moderna stocks is another opportunity on this list for investors that are interested in rising pharma stocks. Moderna is an American biotech company that bases their research and development for vaccines and therapeutics primarily on mRNA molecules. The company already has alliances with other top pharma companies, including AstraZeneca and Merck, which is an indication of its promising future within the healthcare sector.
Market capitalisation: $22 billion
Dividend yield: N/A
P/E ratio: N/A
Investing in pharmaceuticals
Pharmaceutical shares are available to buy and sell on the stock market, and some investors choose to explore pharma stocks through ETF trading.
However, you can also trade on our platform through spread betting or trading CFDs. Spread betting generally enables you to trade tax-free on the price movements of pharmaceutical stocks; however, tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK. You open a position based on whether you think the pharmaceutical share price will rise or fall, and depending on which way the market moves, this will result in a profit or loss. CFDs are contractual agreements to exchange the difference in value of an asset between the time a position is opened and closed. Profits and losses also rely on the movements in the share market. Read about the differences between spread betting and CFD trading here to find a product suitable for you.
Please note that spread betting and CFDs are leveraged products, which means that you are only required to place a deposit of the full value trade to gain exposure to the market. For this reason, profits and losses can be equally magnified.
Pharmaceutical stock news
While trading pharma stocks, it is important to keep up to date with news and key developments across the world. The stock market can be volatile and share prices often fluctuate upon announcements. Our professional market analysts deliver frequent content within our news and analysis section in order to make sure that you have all the information you need when trading rising pharmaceutical stocks.
We also have a trading insights hub that is complete with Reuters news and commentaries, interactive market calendars for data and price charts, and fundamental analysis reports from Morningstar.
How to trade pharmaceutical stocks with CMC Markets
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*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
Disclaimer
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. Past performance is not a reliable indicative of future results.
