Key points
Between the 2017 and 2021 calendar years, total revenue grew from $22bn to $37bn
The firm completed a takeover of Alexion Pharmaceuticals in July 2021
Lynparza, a breast cancer treatment, gained full approval in the US on 14 March 2022
AstraZeneca (LSE:AZN) shot to front page headlines when it developed one of the first Covid-19 vaccines. As a pharmaceutical and biotechnology giant, it operates three segments, including oncology, cardiovascular, and respiratory. Unsurprisingly, the AstraZeneca share price has performed well in recent times. It’s up 34.5% in the past year and currently trades at 9,434p. As the pandemic subsides, however, I want to look deeper into this company to see if I should add it to my long-term portfolio. I have found two reasons why this firm is potentially a good addition. Let’s take a closer look.
Strong historical results
Between the 2017 and 2021 calendar years, the firm’s results have mostly shown consistent growth. Total revenue, for instance, has grown from $22bn to $37bn. Furthermore, net cash flow from operating activities has increased from $3.5bn to $5.9bn.
Both of these figures are encouraging for me as a potential investor. It’s particularly heartening to see net cash flows increase, because this allows the company both to invest in research and development and address its debt. The debt pile is not insignificant and currently stands at around $32bn. It should be noted, however that past performance is not necessarily indicative of future performance.
On the flip side, reported operating profit declined over the same period from $3.6bn to $1bn. What explains this fall? Much of this is due to AstraZeneca’s July 2021 takeover of Alexion Pharmaceuticals. This deal was reported to be worth somewhere in the region of $39bn.
So, while profits took a hit in the short term, I’m hoping that this takeover will enhance the company’s capabilities and range of products in the coming years.
What’s more, the business paid a dividend of $2.87 per share and hopes to increase this to $2.90 in future. While I’m looking at this company for long-term growth, it may also be a decent income source.
Active drug development
Recently, the firm has made solid progress on a number of treatments. Enhurtu, a breast cancer drug, performed well during a Phase 3 trial. In February 2022, the company noted that the drug provided a “clinically meaningful improvement” in survival when compared with chemotherapy.
Furthermore, the business stated in March 2022 that it had struck a collaboration agreement with biopharmaceutical company Neurimmune. This will allow AstraZeneca subsidiary Alexion to develop and manufacture NI006, a treatment for conditions leading to heart failure. This treatment is currently at the Phase 1b stage.
Finally, the firm gained full approval in the US for Lynparza, a treatment for high-risk early stage breast cancer, on 14 March. This tells me that the company is active in research and development, as one might expect of a pharmaceutical business. It’s also progressing more generally with a number of treatments well on the way through the approval process.
Overall, AstraZeneca has mostly strong historical results and is manufacturing and testing a number of life-changing treatments. I will be buying shares in this company without delay.
The post 2 reasons I’m buying at the current AstraZeneca share price appeared first on The Motley Fool UK.
FREE REPORT: Why this £5 stock could be set to surge
Are you on the lookout for UK growth stocks?
If so, get this FREE no-strings report now.
While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.
And the performance of this company really is stunning.
In 2019, it returned £150million to shareholders through buybacks and dividends.
We believe its financial position is about as solid as anything we’ve seen.
Since 2016, annual revenues increased 31%
In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
Operating cash flow is up 47%. (Even its operating margins are rising every year!)
Quite simply, we believe it’s a fantastic Foolish growth pick.
What’s more, it deserves your attention today.
So please don’t wait another moment.
Get the full details on this £5 stock now – while your report is free.
More reading
2 FTSE 100 shares to buy before the 5 April ISA deadline
This FTSE 100 stock would’ve tripled my money in 10 years. Can it happen again?
How I’d invest £1,000 in my Stocks and Shares ISA before the April deadline
Andrew Woods 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.
