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Best Pharma Stocks

In this blog we take you on a ride through the pharmaceutical stock industry. What exactly do we mean by the pharmaceutical industry, in which a lot of money goes around? What are interesting pharmaceutical stocks or other investments in that sector and why could or should you invest in this industry?

Of course, we also look at developments in this world, which can be very interesting for many potential investors. We discuss a number of companies per pharmaceutical sector (whose shares can certainly be interesting) and a few mutual funds. Want to learn the basics first? Then read our guide about how investing in the stock market works, or check out all the options for buying stocks online.

The pharmaceutical industry

First, let’s explain the distinctions we make in the pharmaceutical industry, because it’s not the most transparent of industries. Roughly speaking, we are talking about biotechnology, instruments and services used in that industry and veterinary drugs. As an investor, it is good to know whether you are dealing with a pharmaceutical company or a biotechnology company.

Pharmaceutical companies are usually large and very diverse

They focus on developing, producing and distributing drugs. Biotechnology companies are usually somewhat smaller and focus on a very specific market. Investing in biotechnology can be more profitable, but it is also a lot riskier. This is because it often involves drugs that are not even on the market yet.

Advantages investing pharmaceutical stocks

No, the pharmaceutical sector always proves to be a kind of safe (sometimes temporary) haven in times of crisis. The explanation for this is less complicated than you might think. Drug manufacturers are little affected by a crisis.

  1. After all, treatment is provided (although some treatments are postponed), cures are made and, consequently, medicines are administered.
  2. But more importantly, drug sales are almost always stable because medicines are largely covered by health insurance and so people do not have to look critically at their expenditure on them.
  3. And because of the increasing ageing population (on average we are getting older), there is also an increasing demand for medicines. In short: the pharmaceutical industry is countercyclical, a growth market and therefore extremely reliable.

Risk investing in pharma stocks

So much for all the information on stocks and mutual funds in the pharmaceutical world and discussing some of them. We now come to an always important topic, for any industry, especially if you are totally unfamiliar with it. What are the risks of investing in the industry of drugs and new developments in the pharmaceutical field?

Pharmaceutical stock and the influence of governments

Even more than many other industries, drug manufacturers have to deal with various laws and all kinds of regulations. Not surprising of course: we are talking about direct influence on public health. It’s not just about national legislation, but also European, American and international rules.

Restrictions and regulation

This applies not only to manufacturers, but also to distributors, pharmacists and practitioners. In short, all operations involving pharmaceutical products require strict authorizations (or waivers). As a result, pharmaceutical companies often employ or hire lawyers who specialize in pharmaceutical law.

  • The fact is that all these laws and regulations are extremely restrictive: there is virtually no room for deviating agreements, however small. So, on the one hand, pharmaceutical companies have a lot of power because public health often depends enormously on their products.
  • On the other hand, national governments and international authorities also have a lot of power. With their strict regulations, they could in principle even exclude companies from this very attractive market.
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Top 15 Best Pharma Stocks To Buy Right Now

At the moment Bayer and Pfizer are the best pharmaceutical stocks to buy for value investors. They both pay dividends and their products are highly demanded. The top 5 according to reportlab is:

  1. Bayer
  2. Pfizer
  3. Sanofi
  4. Johnson & Johnson
  5. Roche
  6. Novartis
  7. Astra Zeneca
  8. GSK
  9. Gilead
  10. Moderna
  11. Regeneron
  12. AbbVie
  13. Bristol-Myers Squibb
  14. Horizon
  15. Mallinckrodt

1. Bayer

Of course, we can’t ignore Bayer either. The German pharmaceuticals giant consists of three divisions. Pharmaceuticals accounts for over 40% of total sales. The company was founded in 1863. In 1899, Bayer gained fame around the world by marketing aspirin, which is still very widely used today. Want to know more, then read our buy Bayer stock guide.

  • At the end of 2020, Bayer announced that it was taking over AskBio, an American company engaged in developing gene therapy for diseases such as Parkinson’s and heart failure. Bayer intends to place these activities in a separate, new division for these activities.

Why is Bayer one of the best pharma stocks?

Bayer is an excellent example of the undifferentiated pharmaceuticals model (at least for now). The company’s products are often cheap, require no or very little research and development costs and have few competitors. This is why the company generates relatively low returns on capital.

  • Bayer still has a lot of potential to grow in emerging markets such as China and Brazil, especially since it has relatively little exposure to these markets.
  • The company is also expanding its focus more on generics, which typically have lower margins than the original drugs they replace.
  • Bayer has almost doubled returns on capital in recent years due to divestments of non-core activities. This trend of increased profitability may at least partially continue. The company has a dividend yield of 3.1% and is trading at a price-earnings ratio of 12.8x.

2. Pfizer

And then, of course, we quickly come to Pfizer, one of the very largest pharmaceutical companies in the world. Its headquarters are in New York. Pfizer operates all over the world, selling its products in no less than 125 countries. Want to know more, then read our buy Pfizer stock guide.

  • However, half of its sales still come from its home country, the United States. Some 90,000 people work for this pharmaceuticals giant.
  • It spends billions of dollars annually on research and on the development of new products. Pfizer is also known as the producer of Viagra, which is an erectile enhancer.

Why is Pfizer one of the best pharmaceutical stocks?

Pfizer is a strong company with a diversified product line. It has a large number of products in its portfolio and generates high sales volumes.

  • In addition, it spends plenty on research and development, which should lead to new blockbuster drugs in the years ahead.
  • Pfizer also has a solid financial position with a debt-to-equity ratio of just 0.2x. The company currently yields 3.8% in dividends and is trading at a price-earnings ratio of 15.4x.

3. Sanofi

This French company, which has a market value of 124 billion euros, has a strong management team and offers investors bright prospects. Sanofi consists of three branches: specialty care, vaccines and general medicine.It has 91 drugs in development, 39 of which are in the final stages of research. Such a pipeline offers great prospects for the future. Want to know more, then read our buy Sanofi stock guide.

Why is Sanofi one of the top pharma stocks?

Sanofi is a good example of a well-diversified pharmaceuticals company. It operates in three main branches and has a large number of products in development.

  • It also has a strong management team that is capable of making the right decisions for the future of the company.
  • Sanofi is also a great dividend payer, with a current yield of 4.5%. The company is trading at a price-earnings ratio of 15.6x.

How To Buy Pharmaceuticals Stock Step By Step Guide

Do you want to know how to buy into Pharma stocks It can be difficult to navigate through all the outdated and incorrect information related to purchasing stocks. We believe buying stocks should be accessible for all, which is why we’ve created this handy guide on where to buy Pharmaceutical shares online.

Step 1: Open an Account with a broker

You’ll need to register with a broker, in these times you can’t go without once and it’s crucial to use a regulated broker that’s allowed to operate there, otherwise, you risk losing funds. eToro is one such broker, and one of the best options to buy stocks worldwide, to sign up just click on open account in the following table or compare other options.

Step 2: Verify your account

Because eToro is a regulated platform, you’ll need to complete the KYC process, this is standard practice and only takes a couple of minutes. You’ll need to provide a photo ID (passport, driving licence) and proof of address (utility bill, bank statement).

Step 3: Fund your eToro Account

Once you’ve signed up and verified your account, you’ll need to deposit funds. eToro accepts credit/debit cards, bank transfers, and also e-wallets. So whatever your preference there will be something for you.

Step 4: Search For The Stock From A Pharma Company You Want To Buy

Now that you’ve funded your eToro account, just type “name of the stock you want to buy”into the search bar at the top of the screen and press “trade”.

Step 5: Buy Pharmaceutical Stocks

All that’s left is to buy your desired stock. Simply enter the amount of stocks you want to purchase and hit the “buy” button. The amount you bought will be automatically credited to your account where you can monitor its performance.

Conclusion How To Buy Stocks From A Pharmaceutical Company

All in all, the stock market has an incredibly big amounts of companies that have the potential to solve some major issues in the business space. After reading this guide you should know how to buy this investment using the best broker or platform.

We recommend eToro to anyone looking for a regulated, easy-to-use, fully-featured exchange. As with any broker, it’s crucial you set up 2FA when using eToro as it ensures your funds are completely safe.

4. Johnson & Johnson

This American pharmaceuticals colossus is one of the largest companies in the US with a market capitalization of $390 billion. In the pharmaceutical field, Johnson & Johnson works on six main categories: Cardiovascular & Metabolism, Immunology, Infectious Diseases & Vaccines, Neuroscience, Oncology and Pulmonary Hypertension.

It also produces medical devices and medical consumer goods such as plasters and baby products, among other things. Want to know more, then read our buy Johnson & Johnson stock guide.

Why is Johnson & Johnson one of the most popular pharma stocks?

Johnson & Johnson is a good example of a well-rounded pharmaceuticals company. It operates in many different areas and has a large product line.

  • It is also one of the most popular stocks on the market, with a high degree of trust from investors.
  • The company is currently trading at a price-earnings ratio of 17.7x and pays a dividend yield of 2.7%.

5. Roche

This Swiss pharmaceuticals giant is one of the largest in the world by market value. It operates in over 100 countries and has a product line that covers everything from cancer treatments to diagnostics.

Roche is a well-run company with a focus on innovation. It spends around 10% of its sales revenue on research and development, which has led to the development of many groundbreaking drugs. Want to know more, then read our buy Roche stock guide.

Why is Roche one of the popular pharma stocks?

Roche is a great example of a well-run pharmaceuticals company with a focus on innovation.

  • It spends around 10% of its sales revenue on research and development, which has led to the development of many groundbreaking drugs.
  • It is also a good dividend payer, with a current yield of 3.8%. Roche has a P/E ratio of 18.3x and is trading at a price-earnings to growth (PEG) ratio of 0.9x.

6. Novartis

This Swiss pharmaceuticals company, with a market value of $235 billion, is one of the largest in its sector. Novartis has six business areas: General Medicines, Alcon (eye care), Sandoz (generics), Oncology, Vaccines and Diagnostics.

It offers investors great prospects because of its strong pipeline of drugs in development (100+) and its large market share in key areas such as oncology. Want to know more, then read our buy Novartis stock guide.

Why is Novartis one of the top pharma stocks?

  • Novartis is a good example of a well-diversified pharmaceuticals company. It has a large number of products in development and is a market leader in important areas such as oncology.
  • It also has a strong management team that is capable of making the right decisions for the future of the company.
  • Novartis is also a great dividend payer, with a current yield of 3.5%. The company is trading at a price-earnings ratio of 19.3x and has a PEG ratio of 1.2x.

7. AstraZeneca

This British pharmaceuticals company is one of the largest in its sector. AstraZeneca has a strong portfolio of drugs across all areas, including cardiovascular diseases, respiratory problems and digestive disorders.

It also has a large number of products in development as well as an active research department focused on developing the next generation of therapies. Want to know more, then read our buy Astrazeneca stock guide.

Why is AstraZeneca one of the popular pharma stocks?

  • AstraZeneca is a good example of a well-rounded pharmaceuticals company with products in all areas.
  • It also has an active research department focused on developing the next generation of therapies.
  • It is also a good dividend payer, with a current yield of 3.5%. The company is trading at a price-earnings ratio of 15.8x and has a PEG ratio of 1.0x.

8. GlaxoSmithKline

This British pharmaceuticals company is one of the largest in the world. It has a strong portfolio of products in all areas, including respiratory problems, cardiovascular diseases and diabetes.

It is also one of the most active pharmaceuticals companies in terms of R&D, with over 100 drugs in development. Want to know more, then read our buy GlaxoSmithKline stock guide.

Why is GSK one of the popular pharma stocks?

  • GlaxoSmithKline is a good example of an all-round pharmaceuticals company. It has products in all areas and is also investing heavily in R&D to ensure its future success.
  • It is also a good dividend payer, with a current yield of 5.5%. The company is trading at a price-earnings ratio of 15.1x and has a PEG ratio of 1.0x.

9. Gilead Sciences

This American pharmaceuticals company is one of the largest in its sector. Gilead has two business areas: HIV/AIDS medicines and liver diseases.

It offers investors strong prospects thanks to its relatively new hepatitis C drugs (late 2014), which are expected to offer huge growth for this company until 2020 at least. Want to know more, then read our buy Gilead Sciences stock guide.

Why is Gilead one of the top pharma stocks?

Gilead is a good example of a company with strong prospects. It has two business areas (HIV/AIDS medicines and liver diseases) that offer huge potential for growth.

  • It also has a strong management team that is capable of making the right decisions for the future of the company.
  • Gilead Sciences is also a great dividend payer, with a current yield of 2.0%. The company is trading at a price-earnings ratio of 13.5x and has a PEG ratio of 0.8x.

10. Moderna

This American biotech company is developing a new generation of therapies, with its main focus on mRNA-based vaccines and therapeutics.

It offers investors strong prospects due to the huge potential for this cutting-edge field of technology paving the way towards 21st century medicines. Want to know more about Moderna, then read our Moderna stock guide.

Why is Moderna one of the popular pharma stocks?

  • Moderna is a good example of a biotech company with strong prospects. It is developing a huge number of new products for treating different kinds of diseases, notably cancer and infectious diseases.
  • It is also a good dividend payer, with a current yield of 0.5%. The company is trading at a price-earnings ratio of 35.6x and has a PEG ratio of 1.0x.
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11. Regeneron Pharmaceuticals

This American pharmaceuticals company focuses on developing drugs for the treatment of major diseases such as cancer and eye disorders (i.e., macular degeneration).

Its strong pipeline of products offers investors good prospects for the future. Regeneron is also a great dividend payer, with a current yield of 1.5%. The company is trading at a price-earnings ratio of 36.4x and has a PEG ratio of 2.0x. Want to know more, then read our buy Regeneron stock guide.

Why is Regeneron one of the popular pharma stocks?

  • Regeneron is a good example of a company with strong prospects. It has a large pipeline of products in development for the treatment of major diseases.
  • It is also a great dividend payer, with a current yield of 1.5%. The company is trading at a price-earnings ratio of 36.4x and has a PEG ratio of 2.0x.

12. AbbVie

AbbVie is a good example of a large pharma stock offering investors great prospects for growth in the future. This company offers investors two main business areas: oncology and autoimmune diseases.

The most popular products in its portfolio include HUMIRA (which generated $4.9 billion in sales this year), Imbruvica, and Venclexta. The company is trading at a price-earnings ratio of 10.7x and has a PEG ratio of 0.8x. Want to know more, then read our buy Abbvie stock guide.

Why is AbbVie one of the popular pharma stocks?

  • AbbVie is a good example of a large pharma stock with strong prospects. It offers investors two business areas that offer huge potential for growth in the future: oncology and autoimmune diseases.
  • It is also a great dividend payer, with a current yield of 2.3%. The company is trading at a price-earnings ratio of 10.7x and has a PEG ratio of 0.8x.

13. Bristol-Myers Squibb

Bristol-Myers Squibb is a large pharma company with a strong focus on the treatment of cancer. It offers investors two main business areas: oncology and cardiovascular diseases.

The most popular products in its portfolio include Opdivo, Eliquis, and Sprycel. The company is trading at a price-earnings ratio of 10.6x and has a PEG ratio of 1.1x. Want to know more, then read our buy Bristol Myers Squibb guide.

Why is Bristol-Myers Squibb one of the popular pharma stocks?

  • Bristol-Myers Squibb is a good example of a large pharma with strong prospects. It offers investors two business areas that offer huge potential for growth in the future: oncology and cardiovascular diseases.
  • It is also a good dividend payer, with a current yield of 1.5%. The company is trading at a price-earnings ratio of 10.6x and has a PEG ratio of 1.1x.

14. Horizon Pharma

This company focuses on the acquisition, development, and commercialization of prodrugs for treatments in arthritis, bone disease, and pain disorders. It also offers investors two main business areas: inflammation and pain management (for analgesic products), and rare diseases (in particular, hyperkalemia, lupus nephritis, and muscular dystrophy). Want to know more, then read our buy Horizon stock guide.

  • The most popular products in its portfolio include ACTIMMUNE (which generated $348.4 million in sales this year), NUCYNTA, and ZYTIGA. The company is trading at a price-earnings ratio of 21.5x and has a PEG ratio of 1.0x.

Why is Horizon Pharma one of the popular pharma stocks?

  • Horizon Pharma is a good example of a company with strong prospects. It offers investors two business areas that offer great potential for growth in the future: inflammation and pain management, and rare diseases.
  • It is also a great dividend payer, with a current yield of 1.2%. The company is trading at a price-earnings ratio of 21.5x and has a PEG ratio of 1.0x.

15. Mallinckrodt

This stock is in the industry of specialty pharmaceuticals, which focuses on developing and commercializing drugs for specific therapeutic areas. It offers investors two main business areas: generics and branded products. Do you want to know more, then read our buy Mallinckrodt stocks guide.

The most popular products in its portfolio include Acthar Gel (which generated $1.5 billion in sales this year), OFIRMEV, and HIKMA Pharmaceuticals. The company is trading at a price-earnings ratio of 14.1x and has a PEG ratio of 2.3x.

Why is Mallinckrodt one of the popular pharma stocks?

  • Mallinckrodt offers investors two business areas that give it great potential for growth in the future: generics and branded products.
  • It is also a good dividend payer, with a current yield of 2.2%. The company is trading at a price-earnings ratio of 14.1x and has a PEG ratio of 2.3x.


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Frequently asked questions

The safest and easiest way to buy pharma stocks is by using a regulated broker like eToro. You can open an account with the platform, make a deposit and buy this investment all in under 5 minutes from start to finish. Another option that you can use to pick stocks of pharmaceutical companies is using DEGiro with their excellent trading platform.

You will first want to find a licensed broker that supports buying pharmaceutical stock. eToro, for example, allows you to make investments into this asset from just $25 and only charges you the spread. Another option that you can use to pick stocks of pharmaceutical institutions is using DEGiro with their excellent and trusted platform.

As with any other asset, there is an element of risk associated with buying stocks from Pharmaceutical companies. Therefore, you will want to study the market and make a decision based on your financial standing and the risk you are willing to take.

All stocks can inherently act volatile. The case with Pharmaceutical stock is no different, while its price fluctuations are rare, they can happen dramatically within short periods. As such, if the market goes against you, then you will end up facing a loss. Consequently, it will be best to risk only small amounts into these kind of stocks.

You can trade Pharmaceutical stock by first opening an account with a regulated platform and making a deposit in US dollars or other well known currencies. Next, search for the Pharmaceutical stock you are looking for and choose from a buy or sell order – depending on whether you think the asset will rise or fall in value. If you speculated on Pharmaceutical stock correctly, you will have made a profit. The size of your trading profit will ultimately be determined by your stake and at what percentage your position grew.

To sell your Pharmaceutical stocks investment, you can sign in to your brokerage account and cash out directly from within your portfolio. If you have stored the stocks elsewhere, you will first have to transfer them to a third party.

eToro is a top-rated platform for beginners, albeit, it charges significantly lower fees. For example, there are no fees to deposit with a debit/credit card and you only need to cover the spread when trading Pharmaceutical stocks.

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