Don't worry about the State Pension! These 2 pharma stocks could make you VERY wealthy
The low level of the State Pension is frankly shocking. We at The Motley Fool know it. We like to think that our readers know about it, too, and are doing something about it.
Unfortunately not all investors in the UK and abroad are as clued up as they could be, so we've been at pains more recently to identify a number of investment strategies that could help you stave off retirement poverty.
In a recent article I selected some of the best dividend shares from the FTSE 250 that should more than offset any shortfall caused by the State Pension. Given the positive response to these picks from our audience, I'm at it again today, looking at two great pharmaceutical stocks that could help you to retire on a fortune: Hutchison China MediTech(LSE:HCM) and Animalcare (LSE: ANCR).
Tech This Out
Hutchison isn't turning a profit right now. It isn't expected to turn a profit by the end of the decade at least. But share investors who are in it for the long haul should give the Asia-focused medicines giant close consideration on the back of its bulging product pipeline.
On the immediate horizon, the market waits with baited breath for news on the company's oncology treatment fruquintinib for the remainder of the year. It is expecting approval and launch of the product in China for colorectal cancer in the months ahead, and is also seeking Phase III testing results for lung cancer application soon.
Things are likely to remain exciting in 2019 and beyond. Following positive Phase II data on its savolitinib cancer battler, Hutchison has begun exploring the possibility of accelerated approval from Chinese regulators to bring the treatment to market sooner. In addition, another major drug, tumour treatment sulfatinib, is due to begin Phase III studies in China next year.
Hutchison's global expansion strategy also offers plenty of reason to expect earnings to detonate in the years ahead. During Q2, its Hutchison MediPharma (US) division started operating in New Jersey, a move designed to bolster its R&D and regulatory activities outside of Asia and also prepare the ground for new product launches.
Animal magic
The ballooning market for veterinary medicines also makes fellow AIM stock Animalcare a hot growth prospect.
Investor appetite soured in the spring after it warned that the impact of a changing sales mix on gross margins, allied with a recent rise in competitive pressures, would see earnings fall short of expectations in 2018. This subsequent re-rating now leaves Animalcare dealing on a forward P/E ratio of 12.6 times, and this represents a brilliant time for patient investors to jump in, I believe.
Revenues at the business rose 6.4% in the six months to June, it advised in August, and its bubbly pipeline promises more impressive top-line progress. It has several product launches slated for the remainder of 2018 and for the start of next year, including Cortacare which received approval from the Committee for Medicinal Products for Veterinary European Medicines in June.
An added reason to investing in Animalcare is that the business, unlike the vast majority of pharma players, offers quite fatty dividend yields -- for 2018 and 2019 these sit at 4.2% and 4.3% respectively. There's still a lot to cheer over at the business, and especially at current prices. It's a great buy in my book.
Our top analysts have highlighted five shares in the FTSE 100 in our special free report "5 Shares To Retire On". To find out the names of the shares and the reasons behind their inclusion, simply click here to view it right away!
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
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