AstraZeneca plc isn’t the only high-growth stock I’d buy today

This stock could deliver high returns alongside AstraZeneca plc (LON: AZN).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Stating that AstraZeneca (LSE: AZN) is a high-growth stock may sound rather unusual. After all, the company has delivered a number of years of declining profitability as its patent cliff has come to the fore. The loss of patents on many of its key, blockbuster drugs has caused its pre-tax profit to decline from $7.7bn in 2012 to just $3.6bn in 2016.

Clearly, it has been a challenging period for the business. However, following major investment in its pipeline, the company’s outlook looks set to improve. This could make it a strong growth play for the long run, but it’s not the only stock that could offer impressive returns. Reporting on Tuesday was another healthcare industry company which could be worth buying today.

Improving performance

The company in question is specialist biodecontamination products provider Bioquell (LSE: BQE). It delivered a positive trading update which showed that revenue for the full year will be ahead of its previous expectations. It is expected to be around £29.3m, which is a significant improvement on the prior year’s figure of £26.8m.

Should you invest £1,000 in AstraZeneca right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca made the list?

See the 6 stocks

Within that figure of £29.3m, around £28.6m is from the biodecontamination business. This represents a growth rate of 13% versus the previous year. The remaining £0.7m is from the defence business, where revenues fluctuate significantly from year to year.

Pre-exceptional earnings are due to be significantly ahead of market expectations. This could be a key reason why the stock price of Bioquell increased by around 12% following its update. With the company expected to report a further rise in its bottom line of 10% in the current year. This could help to stimulate investor sentiment towards the company and allow it to post further gains following its share price rise of 130% in the last year.

High total returns

Of course, Bioquell lacks the diversity, size and scale of AstraZeneca. Therefore, the larger of the two healthcare companies could offer a stronger overall risk/reward ratio. With the stock trading on a price-to-earnings (P/E) ratio of 18, it seems to offer a fair price for the long term. It also has a dividend yield of 4.1%, with shareholder payouts being covered 1.4 times by profit. This suggests that they are highly sustainable at their current level and could rise at a relatively fast pace over the long run.

While AstraZeneca may not be a particularly popular stock at the present time, a changing outlook for stock markets could make it a more in-demand company to own. With investors currently focused on cyclical growth stocks, defensive companies which do not have high positive correlation with the rest of the economy are relatively unpopular. This could therefore provide an opportunity for investors to buy them at low prices and achieve relatively high total returns.

With the healthcare sector being highly defensive and offering a high degree of diversity, both AstraZeneca and Bioquell could be worth buying for the long term.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares in AstraZeneca and Bioquell. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the S&P 500 be heading for an almighty crash?

Christopher Ruane shares his take on why he thinks the S&P 500 could be heading for a big fall at…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Down 64%, this FTSE 250 stock offers a 13% dividend yield for investors

This struggling investment banker has suffered significant losses in the past five years, but it has the second-highest yield on…

Read more »

Investing Articles

1 stock market ETF I’ve been buying during the sell-off

The stock market's been all over the place in April, creating a fertile breeding ground for long-term buying opportunities.

Read more »

Investing Articles

As the Sainsbury share price bucks the price-war trend on FY results, I examine the dividend prospects

The J Sainsbury share price has been regaining ground, despite growing fears of intense competition in the supermarket sector.

Read more »

The words "what's your plan for retirement" written on chalkboard on pavement somewhere in London
Investing Articles

Should I invest in a Stocks and Shares ISA or a SIPP to retire early?

Early retirement is the ultimate goal for many investors, but choosing between a Stocks and Shares ISA and a pension…

Read more »

Investing Articles

Is now a great time to consider buying Greggs shares?

Greggs shares have been hammered in 2025. But have they now fallen too far? Paul Summers takes another look at…

Read more »

Investing Articles

Is it still a great time to buy cheap shares as stock market crash fears recede?

Fear of a stock market crash can trigger panic selling... but that surely can't be the best thing to do…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

The Vodafone share price is 24% undervalued, according to analysts

Our writer’s been looking at the latest targets for the Vodafone share price. Although there’s a wide variation, the average…

Read more »