You Will Love These Stocks More in 2013: General Electric Company (GE), Johnson & Johnson (JNJ)

I believe in 2013, J&J will fully integrate its Synthes acquisition for both sales as well as operating synergies. This synergy will add ~$0.03-$0.05 to the company’s EPS in the short run. As Synthes already has a meaningful amount of business in the emerging markets, J&J will also be able to expand its presence in markets like Russia, China, and India in the future. The company is forecasting a growth of around 10%-13% in the emerging markets as compared to just 2%-4% growth in the developed markets.

Additionally, the company’s list of recently approved or to be approved drugs increases my confidence for improved growth in 2013. Let us have a look:

1). J&J’s pharmaceutical segment will provide great support to the company with some promising blockbuster drugs. Pipeline products include Canagliflozin (diabetes), Simeprevir (Hepatitis C), Ibrutinib (chronic lymphocytic leukemia) and Simponi IV (rheumatoid arthritis). These drugs will definitely help the company to sustain the growth in pharma sales in the long run.

2). With recent approval of its prostate cancer drug Zytiga for earlier stages of the disease I expect Zytiga to provide more revenue per patient because of higher pre-chemo use in 2013.

Overall, I believe J&J presents an attractive total return package for the investors with its high dividend yield and long-term growth fundamentals.

Conclusion

All three stocks discussed above will be great additions to any investor’s portfolio. Apart from their strong dividend history, their long-term growth prospects also remain intact. The good quarterly results of these companies have further warmed the investors with higher expectations.

For GE, its improved focus on its profitable and core segments will help it in achieving the targeted growth in 2013. Plus the company’s capital allocation policy is like an icing on the cake for the investors. On the other hand, pharma giants Pfizer and J&J are on long-term growth trajectory with their robust portfolio of drugs. I recommend a buy rating on these three stocks.

The article You Will Love These Stocks More in 2013 originally appeared on Fool.com and is written by Shweta Dubey.

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