These companies are good at outperforming the market.
Research suggests that bull markets tend to last an average of 2.6 years. The bull market we're currently experiencing has lasted almost two years. It may or may not end soon. Stocks that perform well through bull markets may be good to own. Stocks that perform well through both bull and bear markets for five or more years are even better.
Let's look at two companies that have performed well in this bull market and have the tools to keep it that way over the long term. Eli Lilly (L.L.Y. -2.02%) and Regeneron Pharmaceuticals (REGN 1.36%).
1. Eli Lilly
It's hard to find a pharmaceutical giant that has performed better than Eli Lilly over the past few years. The company's growth engine isn't running out anytime soon, so investors can be sure that Eli Lilly will continue to generate big profits for many years to come. What's behind this pharmaceutical company's market-beating profits? Here are two of the most important factors.
First, Eli Lilly has made impressive clinical and regulatory progress. Over the past few years, the company has won approvals for significant new drugs. The list includes cancer drug J-Pilca, immunosuppressant Omvo, diabetes drug Mounjaro, weight loss drug Zepbound, and Alzheimer's disease treatment Kisunla, among others.
Munjaro, Zepbound, and Kisunla are particularly promising. Munjaro could generate more than $5 billion in sales in 2023, its first year on the market. Zepbound should be one of the leaders in the fast-growing anti-obesity field. And Kisunla fills a huge need where so few AD treatments have been approved in the past two decades.
LLY Revenue (Quarterly) Data by YCharts
Second, Eli Lilly has posted solid financial results. The chart above does not fully reflect how well Lilly has performed. The company's revenue was somewhat volatile due to its COVID-19 antibody treatment, but overall it positively impacted the business and contributed in a way that would not have happened otherwise. Eli Lilly still has an attractive pipeline with promising candidates. Retatortide, which could potentially be the next generation of weight loss drug, is one of them.
Meanwhile, the company is expected to continue to perform well: Analysts expect Lilly's earnings per share (EPS) to grow 62.6% annually over the next five years, and even a quarter of that annual growth rate would be considered “good” for a pharmaceutical company the size of Lilly.
The pharmaceutical company has a lot going for it, and we haven't even mentioned its solid dividend program yet. In other words, Eli Lilly remains a great long-term option.
2. Regeneron
Regeneron's first-quarter revenue was $3.15 billion, down 1% from the same period a year ago. The company was also impacted by lower sales of its COVID-19 antibody. Excluding that product, Regeneron's sales were up 7% from the same period a year ago. The company's most significant growth driver is its eczema treatment Dupixent, which it co-markets with a French biotech giant. SanofiDupixent is already one of the best-selling drugs in the world.
Last year, Regeneron took sixth place on the list with global sales of $11.6 billion. The company is still going strong: Dupixent sales in the first quarter of 2024 were $3.1 billion, up 24% year over year. And things look set to get even better: Dupixent is on the verge of gaining an important label expansion in the U.S. to treat COPD (approval was also recently granted in the European Union). By some estimates, this could boost already strong sales of the drug by more than $3 billion.
The drug remains one of the best-selling drugs in the world for the time being, and it's no exaggeration to say it will help boost Regeneron's sales. The biotech company has other promising products, such as Eylea, a treatment for age-related macular degeneration (an eye disease). Cancer drug Libtayo has also contributed to the company's performance. Regeneron also has an attractive pipeline, including in the oncology field.
One of the company's early-stage programs looks very promising – a potential gene therapy for inherited hearing loss that has already cured one patient and significantly improved another in ongoing Phase 1/2 clinical trials. Analysts expect Regeneron's EPS to grow at about 10% annually over the next five years. The company's stock could still deliver market-beating returns.
