Forever is a long time, and the move to buy and hold stocks for good is a decision that should never be approached lightly.
How can you guarantee that a company is capable of delivering solid numbers every year?
One way to approach this is to consider stocks with a long history, especially when these businesses are frontrunners in steadily growing industries that are on track to keep developing and expanding in the next few years.
In the biotechnology and healthcare sector, a name that fits the bill is Amgen (AMGN).
Amgen is a pioneer in the biotechnology sector, with the company developing innovative treatments in oncology, inflammatory conditions, and biosimilars since the early 1980s.
For the past 12 months, Amgen has generated roughly $24.4 billion in revenues globally.
Its first-quarter results for 2022 showed a respectable 6% year-over-year increase thanks to the double-digit growth of its key drug programs. In effect, the company also reported a 15% rise in its adjusted earnings per share.
In particular, the main growth drivers during this quarter are Repatha, which was up 15% to reach $329 million, Evenity, up by 59% to rake in $170 million, and Prolia, up by 12% to report $852 million.
Amgen prides itself on many products, with revenues growing by double-digit percentages, with several newer treatments in the lineup projected to drive top-line growth for an extended period.
Aside from the potential of Prolia, Evenity, and Repatha, Amgen and AstraZeneca’s (AZN) collaborative work, asthma medication Tezspire, and non-small cell lung cancer treatment Lumakras are anticipated to become top-selling products as well.
Approved in almost 40 countries, Lumakras is expected to gain more regulatory approval in the coming years, making the argument for its blockbuster potential stronger than ever.
On top of these, Amgen has over 24 programs queued for clinical trials, with the company continuously bolstering its pipeline.
Meanwhile, its biosimilar arm is growing with 5 high-quality treatments already out on the market and an additional 6 more expected to be launched from 2023 to 2030.
Among the biosimilars in the lineup, perhaps the most exciting and possibly most profitable would be the biosimilar to AbbVie’s (ABBV) mega-blockbuster Humira. Looking at the timeline, Amgen’s candidate should be out by January 2023.
Apart from being a good defensive stock, Amgen is also a great option for income-seeking investors.
This biotech titan offers a 3.08% dividend yield, which is starkly better than the S&P 500’s 1.37%.
Meanwhile, its cash dividend payout of roughly 47.88% is conservative enough to guarantee that the company manages to sustain dividend boosts in the following years.
Over the past 3 years, Amgen’s payouts have increased by 33.79%—and there’s more where that came from.
Lifesaving treatments are crucial to patients, and available therapies for several conditions can always be improved upon. Moreover, there are many diseases with no approved drugs just yet.
In addition, the global population is aging. The number of people aged 60 and above is expected to approximately double by 2050.
This means that the spending on prescription drugs would also go up as the demographic ages.
Hence, companies like Amgen are anticipated to enjoy an even bigger target market in the coming decade.
Those are strong reasons that ensure the longevity of the businesses in the healthcare sector. For high-quality companies, these can serve as excellent catalysts not only for continuous revenue generation but also for potential blockbuster treatments.
As the largest biotechnology company in terms of market capitalization, Amgen continues to deliver positive returns and promise stability to its shareholders amid all the chaos and uncertainties.
With an excellent dividend, bolstered with a solid pipeline, key franchise programs, and lineup, Amgen is a great target for investors looking for stocks to buy and hold for a long time.
