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Pfizer Inc. (PFE), Eli Lilly & Co. (LLY), Baxter International Inc. (BAX): Three Solid Long-Term Pharma Picks

Eli Lilly & Co. (NYSE:LLY) has a strong pipeline of new drugs for Alzheimer’s disease, diabetes, depression, lupus, tumors and rheumatoid arthritis. The company has also announced several cost cutting measures including reduction in its sales staff. Eli Lilly & Co. (NYSE:LLY) currently trades at a reasonable P/E, and has a good dividend history that make it a preferred choice of long-term investors.

Baxter International Inc. (NYSE:BAX) is undoubtedly one of the fastest growing pharmaceutical companies with a focus on renal, bioscience and medical delivery markets. The company’s strong focus on R&D will ensure that new drugs spur the growth and profitability in the long term. Baxter International Inc. (NYSE:BAX) spent $1.2 billion on R&D in 2012, up 20% from the previous fiscal year.

Baxter International Inc. (NYSE:BAX) remains committed to boost growth through organic as well as inorganic growth. In December 2012, the company announced to acquire Swedish firm Gambro AB in a $4 billion cash and debt deal to strengthen its Kidney Division. The deal has made Baxter the world’s second largest kidney dialysis products maker after Fresenius Medical Care AG of Germany.

The acquisition of Gambro made great inroads into European, Asian and Latin American markets for Baxter International Inc. (NYSE:BAX). The company expects Gambro to add at least $0.25 a share to its 2014 earnings.

The company’s dedication towards market penetration, growth, heavy R&D investment and a valuable product portfolio indicate that the company is set to outperform in the long run.

Bottom line

Most importantly, all the three companies are committed to delivering shareholder value. They have great dividend histories and they are currently trading at reasonable P/E ratios. I believe these three pharma stocks will continue to deliver great value.

Vikas Shukla has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Three Solid Long-Term Pharma Picks originally appeared on and is written by Vikas Shukla.

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

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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