The best pharmaceutical stocks you can buy right now for $1,000

Pharmaceutical stocks are an excellent addition to any portfolio in any market environment. Good promises continued revenue growth because patients need the drugs – so that will continue, no matter what happens in the economy. Leading pharmaceutical companies may also have one particular star product that brings in huge revenues, and this growth can impact the stock’s performance. Finally, pharmaceutical stocks often pay dividends, which is an added bonus to ensure that you’ll generate income from this investment every year – without lifting a finger.

Of course, to benefit from all this, you’ll want to invest in these players for the long term, which means at least five years. This gives you the opportunity to potentially win as your revenue grows and you collect passive income along the way. One pharmaceutical company in particular offers everything I mentioned above. And for $1,000 you can buy this player who should offer a fantastic combination of stability and growth over time. Let’s check out these best pharmaceutical products you can buy right now.

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One of the most sought-after pharmaceuticals today

This particular campaign has made headlines this year because it sells one of the most sought-after products: weight loss drugs. In fact, the company is a market leader, generating double-digit revenue growth and billions in revenue every quarter. I’m talking about Eli Lilly (LLY 4.55%)creator of Mounjaro and Zepbound.

Both drugs are based on the same molecule – tirzepatide – but Mounjaro is approved for the treatment of type 2 diabetes and Zepbound is approved for the treatment of weight loss. But doctors prescribed both drugs for weight control, especially before Zepbound was approved a year ago. Mounjaro received regulatory approval earlier in 2022.

These drugs, known as GIP and GLP-1 receptor agonists, work by acting on hormones involved in regulating blood sugar levels and appetite. They have shown excellent results in clinical trials and in the real world, which has helped demand skyrocket. In fact, these Lilly weight loss drugs and similar competitor products are in demand New Nordisk exceeded supply, prompting both companies to increase their production capacity.

Today both Mounjaro and Zepbound did it become hitsand in the last quarter they generated $3.1 billion and $1.2 billion in revenue, respectively. Goldman Sachs predicts that the weight loss drug market could reach $130 billion by the end of the decade, according to Bloomberg. This suggests there could be significant growth.

Lilly’s challenges may be temporary

Still, Lilly faces challenges with increased competition in the future and even compounders grabbing market share today. However, I don’t think these issues will significantly hurt long-term demand for Lilly’s products. While competitors are investigating available weight-loss drugs in the pipeline, Lilly is doing the same – so the pharmaceutical giant could bring other, even better weight-loss drugs to market in the coming years. As for drug manufacturers, they are currently gaining market share, but when the U.S. Food and Drug Administration announces an end to shortages of weight loss drugs, manufacturers must stop serving patients.

Moreover, Lilly has a full portfolio of drugs used in various treatment areas – from cancer to autoimmune diseases – and a number of medicines that are expected to contribute to revenue growth in the future. In the first nine months of the year, Lilly’s four major drugs outside its weight loss portfolio saw double-digit growth compared to the prior period.

Lilly also tries to reward investors, and in the last quarter the pharmaceutical giant returned $1 billion to shareholders in dividends and $500 million in share buyback. The company will pay a dividend of $5.20 per share, representing a yield of 0.6%. This isn’t the highest dividend yield around, but there’s nothing wrong with that considering this company offers not only passive income but also impressive revenue growth. So when you invest in Lilly, you get the earnings trends of growth stocks along with the security of dividend stocks.

Stocks to buy during declines

And the great news is that you can now buy Lilly at 57x estimates of future profits compared to over 70 just a few months ago. It’s true that Lilly’s Mounjaro and Zepbound, which are already bringing in billions of dollars a quarter moving forward, may not be growing as fast as they were when they started.

But these drugs, and potentially new Lilly weight-loss drugs to come, should deliver significant growth over time, which could also translate into a win for investors. So Eli Lilly, with its focus on growth, broad product range, and commitment to dividends, is the best pharmaceutical stock to add to your portfolio.