2 Beaten-Down Stocks to Buy and Hold for 10 Years

It’s easy to find stocks that are lagging broader equities, even in a bull market like the one we’re currently in. It’s harder to find beaten-down stocks that still look worth buying and holding onto for a while. Some corporations are condemned to deliver subpar financial results and stock market performances practically in perpetuity.

Thankfully, Bristol Myers Squibb (BMY -0.10%) and Pfizer (PFE -0.41%), two drugmakers that are failing to keep pace with broader equities, arguably don’t belong to that group. Though these corporations have recently faced issues, there remain excellent reasons to invest in them for the long haul. Let’s dig in deeper to see why.

1. Bristol Myers Squibb

In the first quarter, Bristol Myers’ revenue of $11.9 billion increased by 5% year over year. That’s a decent, though not particularly impressive, performance for a pharmaceutical giant. However, it’s worth pointing out that the company’s year-over-year top-line growth was in the red for several quarters.

BMY Revenue (Quarterly YoY Growth) data by YCharts

Bristol Myers dealt with some important patent cliffs, but it seems to be turning the corner, partly thanks to its portfolio of newer medicines. However, the drugmaker isn’t out of the woods just yet. Cancer drug Opdivo is one of the company’s top-selling products, but it will run out of patent protection by 2028. Bristol Myers should be able to handle this issue, too.

Its newer portfolio comprises medicines that have been approved since 2019 and could generate about $25 billion in revenue by 2030. Most of them should see their sales growing well into the 2030s. Further, Bristol Myers has a plan to counter Opdivo’s sales decline after it hits its patent cliff. The company is developing a subcutaneous version of the medicine, which, it expects, could address between 65% to 75% of Opdivo’s indications.

Bristol Myers should also earn approval for even more brand-new products. Its pipeline features 55 compounds. So, the drugmaker should be just fine over the long run even if it may take some patience before the company fully bounces back. One more reason to buy the stock: Bristol Myers offers quite a decent dividend program. Its forward yield sits at 5.46%, and it has increased its payouts by some 46% over the past five years.

Despite underperforming the market of late, dividend investors should love this stock.

2. Pfizer

Pfizer’s top line is dropping off a cliff. In the first quarter, the company’s revenue of $14.9 billion was down 20% year over year.

However, the drugmaker’s situation is a bit different than Bristol Myers’. Pfizer’s Comirnaty and Paxlovid haven’t run out of patent protection, but with the pandemic receding, neither product is generating nearly as much in sales as it did in 2021 and 2022 or even last year. That’s why Pfizer’s shares have failed to keep pace over the past two years.

Here’s the good news. Pfizer’s coronavirus-related work was a net benefit for the company. The drugmaker’s relatively small investment in developing COVID-19 products paid off for itself several times over. Pfizer became the first company in the history of the biopharma industry to generate $100 billion in annual revenue, money that allowed it to splurge on acquisitions and substantially improve its pipeline.

That’s already paying off. Pfizer launched several brand-new products last year, including Abrysvo, a vaccine for the respiratory syncytial virus, and Litfulo, a therapy for an autoimmune disease called alopecia areata, among others. But Pfizer is far from done. The company currently has 113 programs in its pipeline.

The company is well-positioned to bounce back from its recent poor stock market performances and deliver solid returns over the long run. Pfizer is also a decent dividend stock. Its payouts have increased by just under 17% in the past five years and boast a forward yield of 6.04%. Going against the market by buying this stock and holding onto it would be a great move.