In this article, we discuss the 5 most profitable pharmaceutical stocks. You can go through our detailed analysis of the pharmaceutical sector and its growth trajectory, and go directly to read the 13 Most Profitable Pharmaceutical Stocks Now.
5. Amgen Inc. (NASDAQ:AMGN)
Latest TTM Net Income: $7.57 billion
Number of Hedge Fund Holders: 60
Amgen Inc. (NASDAQ:AMGN) is a global biopharmaceutical company engaged in the research, development, manufacturing, and distribution of human therapeutics. Recognized as one of the notable pharmaceutical stocks, the company focuses on key areas such as oncology/hematology, inflammation, bone health, cardiovascular diseases, nephrology, and neuroscience. As of December 15, Amgen Inc. (NASDAQ:AMGN) offers a quarterly dividend of $2.25 per share, resulting in a dividend yield of 3.27%.
In Q3 2023, the number of hedge funds tracked by Insider Monkey reporting stakes in Amgen Inc. (NASDAQ:AMGN) stood at 60, marking an increase from the previous quarter’s 57. The consolidated value of these stakes is over $2.16 billion.
Aristotle Capital Value Equity Strategy made the following comment about Amgen Inc. (NASDAQ:AMGN) in its Q3 2023 investor letter:
“Amgen Inc. (NASDAQ:AMGN), the biopharmaceutical company, was the top contributor for the quarter. The company continues to leverage its innovative platform to strengthen its product portfolio, offset maturing products, such as Epogen and Neulasta, and increase market share. Over the past year, Amgen has reported double‐digit volume growth, operating margin expansion to over 40% and record levels of sales for cholesterol drug Repatha, bone‐strengthening drug Prolia and cancer drug Blincyto. Additionally, the company remains well positioned to benefit from the continued development and commercialization of biosimilars such as Amgevita, the first biosimilar to Humira, and the successful integration of Otezla to bolster its inflammation segment. Lastly, the FTC agreed to allow Amgen to proceed with its $27.8 billion acquisition of Horizon Therapeutics. We note that this is yet another unsuccessful attempt by the FTC to block an M&A transaction of one of our holdings (see below re: Activision Blizzard). The transaction closed on October 6, 2023 and brings expertise in rare disease therapies (including bulging eye‐drug Tepezza), as well as adds to Amgen’s immunology portfolio.”
4. Bristol-Myers Squibb Company (NYSE:BMY)
Latest TTM Net Income: $8.29 billion
Number of Hedge Fund Holders: 65
Bristol-Myers Squibb Company (NYSE:BMY) is a global biopharmaceutical firm involved in various aspects of the biopharmaceutical industry, including research, development, licensing, manufacturing, marketing, and distribution of biopharmaceutical products. These products are designed to address a wide range of medical conditions, encompassing hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases.
On October 8, Bristol-Myers Squibb Company (NYSE:BMY) announced its entry into a definitive merger agreement to acquire Mirati Therapeutics, Inc. (NASDAQ:MRTX), in an all-cash transaction valued at $4.8 billion. This strategic acquisition is anticipated to enhance and diversify the company’s oncology portfolio.
As of the conclusion of the third quarter this year, Bristol-Myers Squibb Company (NYSE:BMY) attracted investments from 65 out of the 910 hedge funds examined in Insider Monkey’s research.
RGA Investment Advisors made the following comment about Bristol-Myers Squibb Company (NYSE:BMY) in its Q3 2022 investor letter:
“Bristol-Myers Squibb Company (NYSE:BMY), which we referenced above, boasts a double digit free cash flow yield that gets divided roughly equally between repurchases, a dividend and M&A in what is the best environment for acquisitions perhaps ever. In 2019, BMY acquired Celgene, who had one of the better corporate development programs in the industry. We view this as a great outlet for us as generalists considering a company like BMY should truly thrive with the ability to acquire outstanding assets and science at depressed valuations. We touched on the Turning Point acquisition above and we expect the company to be increasingly active in the M&A landscape. Importantly, Celgene also came to BMY with a phenomenal CAR-T platform. CAR-T is a cell therapy that activates the body’s immune system to target cancers. This will be a key growth vector alongside M&A in overcoming the company’s patent cliff.”
3. CVS Health Corporation (NYSE:CVS)
Latest TTM Net Income: $8.47 billion
Number of Hedge Fund Holders: 64
Headquartered in the United States, CVS Health Corporation (NYSE:CVS) is a prominent healthcare organization overseeing an extensive network of retail pharmacies and clinics nationwide. The company manages various brands, including CVS Pharmacy (a retail pharmacy chain), CVS Caremark (a pharmacy benefits manager), and Aetna (a health insurance provider).
The third quarter of 2023 witnessed CVS Health Corporation (NYSE:CVS) achieving sales of $89.76 billion, indicating a nearly 11% increase from the corresponding period in the previous year. The company disclosed a net income of $2.27 billion, or $1.75 per share, for the third quarter. This marked a significant turnaround from the net loss of $3.40 billion, or $2.59 per share, reported for the same period a year ago. Excluding specific items such as amortization of intangible assets and capital losses, the adjusted earnings per share for the quarter stood at $2.21.
As of the conclusion of the third quarter in 2023, data from Insider Monkey’s database, monitoring 910 hedge funds, indicated that 64 hedge funds had positions in CVS Health Corporation (NYSE:CVS). The firm’s largest shareholder was John Overdeck and David Siegel’s Two Sigma Advisors, which owned $344 million worth of shares.
Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:
“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.
By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)
2. Pfizer Inc. (NYSE:PFE)
Latest TTM Net Income: $10.47 billion
Number of Hedge Fund Holders: 73
Established in 1849 by German entrepreneurs Charles Pfizer and Charles F. Erhart, Pfizer Inc. (NYSE:PFE) is a renowned multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan, New York City. Recognized globally for its extensive contributions to medical research, development, and production, Pfizer operates across various medical fields, including immunology, oncology, cardiology, endocrinology, and neurology. In 2022, Pfizer Inc. (NYSE:PFE) achieved remarkable success with its COVID-19 vaccine Comirnaty, generating an impressive $37.8 billion in alliance revenues and direct sales.
As of the conclusion of Q3 2023, data from Insider Monkey’s database revealed that 73 hedge funds maintained stakes in Pfizer Inc. (NYSE:PFE), a figure unchanged from the previous quarter. The combined value of these stakes exceeds $2.4 billion.
1. Johnson & Johnson (NYSE:JNJ)
Latest TTM Net Income: $13.99 billion
Number of Hedge Fund Holders: 84
Established in 1886, Johnson & Johnson (NYSE:JNJ) is a prominent American corporation celebrated for its groundbreaking innovations in medical devices, pharmaceuticals, and consumer packaged goods. The multinational giant boasts an impressive 61-year track record of consistent dividend growth, currently offering a quarterly dividend of $1.19 per share.
On October 17, Johnson & Johnson (NYSE:JNJ) announced adjusted earnings and revenue that exceeded the forecasts of Wall Street, subsequently increasing its full-year guidance due to robust sales in both its pharmaceutical and medical devices divisions. The pharmaceutical company also disclosed net income of $4.31 billion, equivalent to $1.69 per share. This figure remained consistent with the net income of $4.31 billion, or $1.62 per share, reported for the corresponding period in the previous year.
In the third quarter of 2023, the number of hedge funds tracked by Insider Monkey with holdings in Johnson & Johnson (NYSE:JNJ) declined to 84, down from 88 in the prior quarter. The collective investments by these hedge funds surpass a total value of $4.15 billion. A leading hedge fund investor in Johnson & Johnson (NYSE:JNJ) is Bridgewater Associates, managed by Ray Dalio, with a substantial stake valued at approximately $424.3 million.
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