Johnson & Johnson (JNJ), Pfizer Inc. (PFE), Novartis AG (ADR) (NVS): Is There Growth Left in Massive Drug Stocks?

While I adore the business model and I respect the aggressive stance Novartis AG (ADR) (NYSE:NVS) takes, my research has also uncovered some dark spots that may give you a pause. In cases such as mislabeling and over-advertising drugs like Focalin XR and the company’s outright refusal to donate flu vaccines to poor countries with epidemic-level outbreaks, you have to make your own gut check. If you love profit above all else, Novartis AG (ADR) (NYSE:NVS) is hardcore with a no-nonsense method and 16.7% profit margins. If you prefer investing in more gentle companies, this may not be the one for you.

The Foolish bottom line

You have a higher statistical likelihood of having a ten-bagger with a small cap stock, and these companies are very much the opposite of that. But, if you like to enjoy steady dividends, business models that make sense, and a lot of potential for profit with reasonable growth prospects, there is still money to be made in huge pharma. Just be sure to look for reasonably low multiples, and don’t be afraid to make an unpopular investment if the company is solid on the inside.

The article Is There Growth Left in Massive Drug Stocks? originally appeared on Fool.com and is written by Chris Hodge.

Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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