Business

Better Buy: Gilead Sciences vs. Pfizer


Both have impressively broad and advanced drug development pipelines, and both have a history of profitable operations, not to mention acceptable dividend yields above 3%.


Recently, Gilead has been in the headlines thanks to its much-discussed antiviral drug remdesivir , which appears to be somewhat beneficial for treating coronavirus infections in certain patient populations.


But remdesivir might not be a reliable driver of growth for the company if competitors develop more effective therapeutics, so long-term investors should take care not to overestimate the drug's importance to Gilead's future.


Much like Gilead, Pfizer's most recent major project is its coronavirus vaccine, which is currently in a combined phase 2/3 clinical trial.


However, over the past five years, Pfizer's return on assets (ROA) increased by 104%, a stunning advantage over Gilead's, which fell by nearly 81% in the same period.


If Pfizer's vaccine doesn't make it through clinical trials, its investment will be wasted, and remdesivir's performance may help Gilead to close the gap between the two stocks.






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