The stock market entered the new week with some worries about the future, but at least among growth investors, the mood was not as bad as it was last week. As of Monday, the Nasdaq Composite (Nasdaq shares) managed to eliminate all of his losses and barely tick in positive territory on the day. This was considerably better than the rest of the stock market, which was significantly lower on Monday.
Despite the resilience of the day, many Nasdaq stocks have taken big hits so far in 2022, with even some of the largest companies in the market seeing drops of 50% or more. However, a couple of Nasdaq stallions managed to challenge the skeptics and lost very little ground from their recent highs. Below, we'll take a closer look to see why Amgen PepsiCo have become a favorite among those looking for more stable investments in a turbulent market environment.
Shares in Amgen have fallen only 2% from their best levels of 2022. The stock has actually risen 11% so far this year, challenging the general decline of the Nasdaq.
Amgen is already a giant in the biotech industry. Blockbuster drugs like rheumatoid arthritis treatment Enbrel and osteoporosis fighting Prolia have generated substantial revenue for Amgen, and the 2019 acquisition of Otezla psoriasis treatment from Celgene added another big sales generator for the company.
At the same time, Amgen has a promising treatment pipeline in development. One particularly interesting treatment is sotorasib, marketed under similar names Lumykras and Lumakras, which has gained approval in Europe and Japan for the treatment of patients with non-small cell lung cancer. Additionally, Amgen is working on biosimilar versions of successful treatments from rival pharmaceutical companies, which could further increase sales.
Healthcare has traditionally been a defensive area, and while many biotech stocks are speculative, Amgen already has the track record to give investors confidence in its future. This is why biotech has been able to hold up so well even in a tough 2022, and the stock has a lot of potential to continue to rise in the future.
PepsiCo remains sparkling
PepsiCo's stock didn't do as well as Amgen this year, posting a small loss. However, the stock was only down around 2% from its recent highs as investors learned to appreciate the snacks and drinks giant's earnings reliability.
PepsiCo has an impressive portfolio of products that include the Frito-Lay line of chips and other snack foods, as well as its eponymous line of fizzy drinks. The company has not been immune to the impact of inflation, both from the ingredients that go into its products and the higher wages that employees are asking for in a tough job market for employers.
Dividend investors also have a lot to like about PepsiCo. The dividend yield of 2,5% is well above the market average, and PepsiCo has a track record of annual increases dating back decades. This dividend income was able to serve as a buffer for past share price declines.
PepsiCo may not have the huge growth prospects that many Nasdaq stock investors expect to see. However, it also has stability in demand that should serve it well, and this is a feature defensive investors find increasingly attractive.