The Fed’s aggressive rate hikes to curb sky-high inflation and geopolitical issues have kept the market extremely volatile this year. However, inflation is finally cooling, as indicated by a decline in inflation in October. Also, the core Personal Consumption Expenditures index rose 0.2% month-over-month in October.
Regardless of market conditions, medical stocks tend to perform relatively well due to the inelastic demand for medical products and services. Moreover, the need for accurate medical diagnoses has increased amid the rising number of chronic disease-affected patients globally.
According to Polaris Market Research, the global diagnostic services market is projected to grow at a CAGR of 13.3% by 2030.
Given the backdrop, fundamentally sound medical stocks AbbVie Inc. (ABBV) and Bristol-Myers Squibb Company (BMY) might be ideal buy-and-hold options for the long term.
AbbVie Inc. (ABBV)
Biopharmaceutical company ABBV engages in the research, development, manufacturing, commercialization, and sale of medicines worldwide. The company’s products are segmented into Immunology; Oncology; Anaesthetics; Neuroscience; Eyecare; Women’s Health; and Others.
On December 6, 2022, ABBV and HotSpot Therapeutics, Inc. announced an exclusive worldwide collaboration. This collaboration aims to deliver a new target class of modulators to patients with severe autoimmune diseases, thereby strengthening the company’s immunology pipeline.
ABBV has paid dividends for 11 consecutive years. Over the last three years, ABBV’s dividend payouts have grown at a 9.6% CAGR. While ABBV’s four-year average dividend yield is 4.64%, its current dividend translates to a 3.57% yield.
ABBV’s net revenues came in at $14.81 billion for the third quarter that ended September 30, 2022, up 3.3℅ year-over-year. Its net earnings increased 24.2% year-over-year to $3.95 billion. In addition, its EPS increased 29.3 year-over-year to $3.66.
ABBV’s revenue is expected to increase by 3.9% year-over-year to $58.31 billion in 2022. Its EPS is expected to grow 17.2% year-over-year to $13.87in 2023. It surpassed EPS estimates in three of four trailing quarters. Over the past year, the stock has gained to close the last trading session at $165.99.
ABBV’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABBV has an A grade for Quality and a B for Growth and Sentiment. In the Medical - Pharmaceuticals industry, it is ranked #6 out of 160 stocks. Click here for the additional POWR Ratings for Value, Momentum, and Stability for ABBV.
Bristol-Myers Squibb Company (BMY)
BMY engages in the global discovery, development, licensing, manufacture, and sale of biopharmaceutical products. The company’s offerings include products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases.
On November 29, 2022, BMY and Envisagenics, an Artificial Intelligence -driven biotechnology company, announced their research collaboration agreement. Under the agreement, Envisagenics’ SpliceCore® AI platform will enhance BMY’s oncology portfolio.
Also, on November 10, 2022, BMY announced Health Canada’s approval of CAMZYOSTM (mavacamten capsules) for treating symptomatic obstructive hypertrophic cardiomyopathy. This marks yet another milestone achievement for the company.
BMY has paid dividends for 33 consecutive years. Over the last three years, its dividend payouts have grown at a 9.6% CAGR. While BMY’s four-year average dividend yield is 3.03%, its current dividend translates to a 2.70% yield.
BMY’s total expenses came in at $9.01 billion for the third quarter that ended September 30, 2022, down 4.8% year-over-year. Moreover, its net earnings came in at $1.61 billion, up 3.9% year-over-year. Its EPS came in at $0.75, up 8.7% year-over-year.
BMY’s revenue is expected to increase by 2.7% year-over-year to $47.11 billion in 2023. Its EPS is expected to grow 4.5% year-over-year to $7.95 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 36.6% to close the last trading session at $79.88.
BMY has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade Value and a B for Quality, Stability, and Sentiment. It is ranked #4 in the same industry.
Beyond what is stated above, we’ve also rated BMY for Growth and Momentum. Get all BMY ratings here.
ABBV shares were trading at $164.74 per share on Friday afternoon, down $1.25 (-0.75%). Year-to-date, ABBV has gained 26.41%, versus a -15.75% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
2 Top Medical Stocks to Buy and Hold for the Long Term StockNews.com
