Better Buy: Amgen vs. Gilead Sciences

Healthcare stocks can be great long-term buys, and with the coronavirus in the headlines on a daily basis, some are proving to be attractive buys in the short term as well. Gilead Sciences (NASDAQ: GILD) is an example of a stock that's been flying high in recent weeks on news that its drug remdesivir may be an option to treat the virus. But that alone may not be enough to make the stock a good long-term investment, especially when compared with Amgen (NASDAQ: AMGN), which may be able to provide investors with a bit more stability and predictability than Gilead. Let's take a closer look at these two stocks to see which is the better long-term investment today.

Amgen released its full-year results on Jan. 27, and it was an underwhelming performance for the company. The drug manufacturer's revenue of $23.4 billion was slightly down from the prior year, and since 2015, the company's top line has risen by just 7.8%. It's not the kind of growth that's going to inspire a lot of excitement from investors, which explains why over the past five years the stock is up just 36%, well below the S&P 500's returns of over 50%. But that's still better than the 24% decline Gilead's been on during that time.

Amgen's been consistently profitable over the years, but its net income of $7.8 billion in 2019 was also down 6.6% from the prior year. The good news is that it has averaged a profit margin of at least 23% in nine of the past 10 fiscal years. But if sales don't improve, the bottom line won't get any stronger.

Source Fool.com