3 No-Brainer Stocks to Buy in June | The Motley Fool (2024)

You're probably familiar with the old adage, "April showers bring May flowers." And you probably know the punchline to the question, "What do May flowers bring?" (The answer: Pilgrims.)

But what does June bring? Three Motley Fool contributors think the new month should usher in great investing opportunities. Here's why they picked AbbVie (ABBV 0.60%), AstraZeneca (AZN -0.90%), and Vertex Pharmaceuticals (VRTX -0.44%) as no-brainer stocks to buy in June.

AbbVie is a stock that covers all of the bases

Keith Speights (AbbVie): Some stocks only appeal to income investors. Others are only attractive to value investors. In many cases, stocks in either category offer dismal growth prospects. AbbVie is an exception that covers all of the bases.

Want income? AbbVie is a Dividend King with 52 consecutive years of dividend increases. Since spinning off from Abbott 11 years ago, the drugmaker has increased its dividend payout by a whopping 269%. Its forward-dividend yield is only a hair below 4%.

While many stocks trade at a premium in the roaring bull market, AbbVie looks relatively cheap. Its shares trade at less than 13.9 times forward earnings.

Growth might seem to be AbbVie's Achilles' heel. Plunging sales for the company's top-selling drug, Humira, which now faces biosimilar competition in the U.S. and Europe, continue to weigh heavily on AbbVie's overall revenue and profits.

There's a light at the end of the tunnel, though. Thanks to soaring sales of newer drugs, including Skyrizi, Rinvoq, and Vraylar, AbbVie expects to soon return to robust growth in the high single-digit percentages through the end of this decade.

AstraZeneca could look like a steal in a few years

David Jagielski (AstraZeneca): A top healthcare stock to buy this month is AstraZeneca. The U.K.-based pharmaceutical giant can be an excellent fit for any type of portfolio. It pays a dividend of around 2%, its operations are broad and diverse, and the company is eyeing plenty of growth opportunities in the future.

By the end of the decade, AstraZeneca expects to get its top line to $80 billion thanks to the expansion of its pipeline and new product launches. It projects that it will develop as many as 20 new medicines within the next six years. That's a significant amount of growth ahead for the business; in 2023, AstraZeneca's top line came in at just under $46 billion. And investors can expect earnings to also improve significantly as the company's net-profit margin was 13% of revenue last year.

That means that this already cheap stock could look like an even bigger bargain down the road. Trading at 18 times its expected future earnings, the stock's valuation is attractive when compared to the average healthcare stock, which trades at a forward-earnings multiple of 20. And when taking into account its long-term growth, AstraZeneca stock looks even cheaper, trading at a price-to-earnings-to-growth (PEG) multiple of right around one.

Whether you're buying AstraZeneca for its dividend or its impressive growth prospects, the stock makes for a no-brainer buy right now.

Innovation at Vertex is paying off

Prosper Junior Bakiny (Vertex Pharmaceuticals): The argument for investing in Vertex Pharmaceuticals could touch on many aspects of the company's business. There is Vertex's cystic fibrosis (CF) franchise, an area where it holds a monopoly. Vertex's CF therapies have consistently driven strong top- and bottom-line growth.

There is more where that came from since there remains a sizable subset of this population in the countries where the biotech does business that haven't been treated yet.

We could also mention Vertex's brand-new approval, that of Casgevy, the first CRISPR-based gene-editing medicine to earn the green light. Casgevy treats a pair of blood-related diseases and looks destined to become a blockbuster. Vertex Pharmaceuticals also has several promising, late-stage programs and recent positive phase 3 data readouts. Those are all great things to mention when discussing Vertex's prospects.

However, the common thread between them is Vertex's innovative ability, and that's the real reason the biotech is a no-brainer buy. Vertex Pharmaceuticals has repeatedly demonstrated its potential in developing novel therapies, especially in areas with unmet needs. Having established a culture centered around innovation, the upside for Vertex could be formidable.

So, while it is true that the company's current lineup and pipeline look incredibly strong, Vertex's portfolio could look different in five years. What should remain the same is the company's relentless pursuit of newer and better products, and its uncanny ability to succeed in enough of those pursuits to deliver strong results and consistent stock market performances. That's why the stock is a buy in June.