There Is Potential in This Highly Lucrative Industry: Gilead Sciences, Inc. (GILD), Bristol Myers Squibb Co. (BMY), Johnson & Johnson (JNJ)

Bottom Line

Gilead Sciences, Inc. (NASDAQ:GILD) is still the top dog in the fight against AIDS, but the followers are not far behind. Truvada has been approved as a vaccine for AIDS, but the company is still trying to find a permanent treatment for the affliction. The treatment of the Mississippi child was carried out using BMY/Pfizer drugs zidovudine and lamivudine. This is a major win for the fight against AIDS, but Gilead investors should keep a close eye on further developments in this regard.

Gilead is trading at forward P/E of 15.9x and 7% below the mean sell side target price of $48. The stock has appreciated by a mammoth 114% in the last two years and still continues to grow. The fight against AIDS is still not over, and there are a number of companies  trying to find a permanent cure. I believe that Gilead will continue to dominate this market and remains a top investment option despite recent price appreciation.

Pfizer and Bristol Myers Squibb Co. (NYSE:BMY) have a diverse drug portfolio and are considered a dividend bet. The companies have stellar dividend yields along with chances for capital appreciation. The market for curing kids from AIDS is a huge market when it comes to numbers, but most reported cases are in the developing world, which makes this market less lucrative. The success should still be a big victory for both companies and should be considered an R&D success. Gilead should watch out for further developments in the oncology pipelines of both companies because these big-pharmaceuticals have proven their R&D strength with this success.

The article There Is Potential in This Highly Lucrative Industry originally appeared on Fool.com and is written by Mohsin Saeed.

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