10 Best Drug Stocks to Buy Now

3. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 81

Johnson & Johnson (NYSE:JNJ) develops, manufactures, and sells a range of products in the healthcare field through its subsidiaries. With a primary focus on products related to human well-being and health, the company operates through two segments: Innovative Medicine and MedTech. Its Innovative Medicine segment encompasses various therapeutic areas, including infectious diseases, immunology, neuroscience, metabolic and cardiovascular diseases, pulmonary hypertension, and oncology. The MedTech segment includes an elaborate range of medical devices and products used in cardiovascular intervention, orthopedic, interventional solutions, surgery, and vision fields. Johnson & Johnson (NYSE:JNJ) also offers a commercially available intravascular lithotripsy (IVL) platform through its MedTech segment for peripheral artery disease (PAD) and coronary artery disease (CAD).

The company has solid fundamentals and a AAA credit rating, higher than the US government’s. Its elaborate portfolio features over 10 blockbuster drugs and several therapeutic domains, ranging from oncology to infectious diseases. Its medical device manufacturing segment further diversifies its operations. On January 13, Johnson & Johnson (NYSE:JNJ) announced the $14.6 billion acquisition of neurological drugmaker IntraCellular. This acquisition will allow the company access to Caplyta, an oral drug for the treatment of bipolar disorder and schizophrenia.

Apart from that, the company has strong fundamentals. Johnson & Johnson (NYSE:JNJ) reported sales of $88.8 billion for fiscal year 2024, reflecting a 4.3% year-over-year growth. These strong results reflect the company’s high-growth strategy. It has a solid balance sheet and generates enough cash flow through its operations to cover its high-yielding dividend. Johnson & Johnson (NYSE:JNJ) has various other growth opportunities as well, such as the robotic-assisted surgery industry. It is developing the Ottava system to compete in the sector, which is expected to drive further growth for the company after its approval.