In this article, we discuss the 5 best diabetes stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Diabetes Stocks To Buy Now.
5. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 61
Abbott Laboratories (NYSE:ABT) is a $225 billion medical device company that sells diabetes care products including blood glucose monitoring systems and diabetes management systems. In its third-quarter earnings, the Illinois-based healthcare company recorded a 33% year-over-year growth in diabetes care revenue totaling $1.12 billion. Overall, the company’s revenue in the third quarter was $10.93 billion, beating revenue estimates by $1.36 billion.
Aside from the fact that Abbott Laboratories (NYSE:ABT) has a 5-year average sales growth rate of 12.40%, investors value the company’s dividend-paying consistency. The medical device company offers a 1.42% dividend yield.
Following solid third-quarter results, Morgan Stanley analyst David Lewis maintained an Overweight rating on Abbott Laboratories (NYSE:ABT) on October 21 and increased his price target for the stock to $146 from $136.
4. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 64
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company whose products are sold in more than 120 countries. The Indiana-based drug manufacturer ranks fourth on the list of 10 best diabetes stocks to buy now. The company manufactures insulin injections for patients with type 1 or type 2 diabetes.
Additionally, Eli Lilly and Company (NYSE:LLY) recently highlighted positive clinical results from its new diabetes pipeline, Tirzepatide, on October 19. Tirzepatide is a potential type 2 diabetes medication that could produce $10 billion in sales and add to the pharmaceutical giant’s promising pipeline of new treatments, according to analysts. Eli Lilly and Company (NYSE:LLY) plans to submit the drug to regulatory authorities in the US and globally by the end of 2021.
Shares of Eli Lilly and Company (NYSE:LLY) soared 44%, year to date. On October 11, Eli Lilly and Company (NYSE:LLY) was upgraded to Buy from Hold by analyst Kerry Holford of Berenberg. According to the analyst, the drug company’s pipeline advancement has effectively sealed Eli Lilly’s long-term sales growth, sitting at 10% yearly through 2030 compared to a peer average of 4%. Holford increased his price target for the stock to $270 from $240.
Overall, 64 elite hedge funds have a positive sentiment on Eli Lilly and Company (NYSE:LLY) by the end of the second quarter of 2021, compared to 55 in the previous quarter.
Eli Lilly and Company (NYSE:LLY) is a suitable option for income investors, as the company pays an annual dividend of $3.40 per share.
In the Q2 2021 investor letter of Baron Funds, the fund mentioned Eli Lilly and Company (NYSE:LLY) and discussed its stance on the firm. Here is what the fund said:
“We started a position in Eli Lilly and Company, a large-cap pharmaceutical company. We think Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to high single-digit revenue growth and mid-teens earnings growth over the next five years. Lilly’s pipeline includes donanemab, a potential blockbuster drug which the company is developing for Alzheimer’s disease and which recently received Breakthrough Therapy Designation by the FDA.”
3. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 68
As a dividend aristocrat that has continuously increased dividends for the past 44 years and delivered passive income to shareholders, Medtronic plc (NYSE:MDT) ranks third on our list of the 10 best diabetes stocks to buy now. The Irish medical device company offers a decent dividend yield of 2.05% and has a payout ratio of 44.15%.
Medtronic plc (NYSE:MDT) manufactures a variety of continuous monitoring glucose (CGM) systems and insulin pumps. The company’s diabetes segment revenue increased by 2% to $572 million in the first quarter of fiscal 2022, driven by continuous demand for insulin pumps globally. Overall, the medical device company’s revenue increased by 23% year on year to $8 billion in the quarter that ended in June.
The Dublin-based medical device company has recently been in active discussions to buy Israeli startup Triple Jump for $300 million, after initially investing $20 million last year. Triple Jump was founded in 2015 and is developing insulin pump therapy with smartphone connectivity. Following this announcement, Piper Sandler analyst Matt O’Brien kept a $152 price target on Medtronic plc (NYSE:MDT) with an Overweight rating on October 18.
Diamond Hill Capital is one of the biggest stakeholders of Medtronic plc (NYSE:MDT) as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 68 funds were bullish on Medtronic plc (NYSE:MDT) by the end of the June quarter, compared to 65 in the previous quarter.
2. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical company based in New Jersey that develops and sells treatments for diabetes and other chronic diseases. The company’s pioneer anti-diabetes medication, Januvia, received its FDA approval in 2006.
In addition to Merck & Co., Inc.’s (NYSE:MRK) expanding line of medications, the FDA approved Steglatro, a type 2 diabetes medication co-developed with Pfizer Inc. (NYSE:PFE), in 2017.
On November 1, Argus analyst David Toung upgraded Merck & Co., Inc. (NYSE:MRK) to Buy from Hold with a price target of $110.
Of the 873 elite funds tracked by Insider Monkey, 79 were long Merck & Co., Inc. (NYSE:MRK) at the end of June. Washington-based investment firm Fisher Asset Management is the leading stakeholder of the company with 10.3 million shares worth $802 million.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Big pharma Johnson & Johnson (NYSE:JNJ) tops the list of 10 best diabetes stocks to buy now. The New Jersey-based healthcare firm markets Invokana, an FDA-approved type 2 diabetic medication that decreases blood sugar in adults while also lowering the risk of stroke and heart attack.
Johnson & Johnson (NYSE:JNJ) also manufactures consumer health products, medical devices, and other prescription medications to treat cancer, hypertension, psoriasis, and chronic brain disorders such as schizophrenia. Johnson & Johnson (NYSE:JNJ) is also one of the biggest vaccine makers in the world. On October 20, the FDA approved the drugmaker’s single booster shot for people aged 18 and up.
The drug manufacturer saw a 10.7% year-over-year total sales growth to $23.3 billion in the third quarter of 2021. Shares of Johnson & Johnson (NYSE:JNJ) climbed 13% in the past twelve months.
Jayson Bedford of Raymond James maintained an Outperform rating on Johnson & Johnson (NYSE:JNJ) and set a price target of $178 per share.
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