AI stocks have led the market in recent years. But as investors question the costs and future returns of the AI boom, some are looking for options outside the tech sector.
Bristol-Myers-Squibb (BMY), Colgate-Palmolive (CL), and Gilead Sciences (GILD) each are remarkable for their own reasons: essential medicines, everyday household products, and proven treatments for serious illnesses. While none of these companies can avoid market swings, healthcare and consumer products are often defensive in nature, offering more stability than AI stocks. All three also pay quarterly dividends, adding to their appeal for income-seeking investors looking beyond AI stocks.
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1. Bristol Myers Squibb: A Pharmaceutical Business With More Growth Drivers
Bristol Myers Squibb is a pharmaceutical company that develops medicines to treat serious diseases, including cancer, heart conditions, immune disorders, and blood diseases. Its major drugs include Eliquis, a blood thinner, and Opdivo, an immunotherapy cancer treatment. Bristol offers a forward dividend yield of 4.3% and has increased its dividends for the past 18 years consecutively.
While most AI stocks have suffered this year, BMY stock has climbed 14.3%, outperforming the overall market. The company is regarded as a strong defensive pick because its business is not standing still. While it faces patent-expiration risks for older drugs, it is expanding its portfolio with newer medicines.
www.barchart.com In the second quarter, the company’s growth portfolio brought in $7.6 billion in revenue, a 15% increase from last year. Total revenue reached $13 billion, with the new portfolio accounting for nearly 60% of the business. Eliquis remains a key revenue driver. Newer cancer treatments and possible therapies for conditions like multiple myeloma and idiopathic pulmonary fibrosis could also help the company grow. However, the business will depend on positive clinical results, regulatory approvals, and successful commercial launches.
Overall, Wall Street rates BMY stock as a “Moderate Buy.” Out of 30 analysts, 13 call it a “Strong Buy,” one rates it a “Moderate Buy,” 15 recommend holding, and one suggests a “Strong Sell.”
www.barchart.com 2. Colgate-Palmolive: Everyday Products May Help Protect Against Tech Market Swings
Colgate-Palmolive is a consumer-facing company that makes everyday products like toothpaste, toothbrushes, household cleaners, and pet nutrition items. When budgets tighten, people may delay big purchases, but they still buy daily personal-care and household products. This means Colgate’s business does not rely on a surge in AI-related spending. Not only does Colgate-Palmolive offer a forward dividend yield of 2.27%, but it is also a “Dividend King," having increased its dividends for the past 64 years in a row.
The company reported revenue of $5.36 billion and adjusted earnings of $0.99 per share in the second quarter. Organic sales increased in four out of five divisions, with emerging markets like India, Brazil, Mexico, and China driving much of the growth. The company’s global brands and distribution network are key strengths. Colgate stands out because demand for its products tends to be steady and predictable.
www.barchart.com CL stock has climbed 20.2% year to date, trading close to its mean target price of $97.48. Wall Street remains moderately bullish about CL stock. Out of the 22 analysts covering it, 10 rate it a “Strong Buy,” while three rate it a “Moderate Buy,” eight say it is a “Hold,” and one says it is a “Strong Sell.” Its high target price of $110 implies a 17.7% upside potential over the next 12 months.
www.barchart.com 3. Gilead Sciences: Meeting Demand for Essential Medicines and Expanding Its HIV Business
Gilead Sciences develops treatments for serious diseases, including HIV, viral hepatitis, and cancer. For many patients, these medicines are essential to managing long-term health conditions.
Gilead stock has gained 26% so far this year, outperforming the S&P 500 Index ($SPX) gain of 13%. Gilead offers a forward dividend yield of 2.14% and has increased its dividends for each of the past 11 years.
www.barchart.com Steady demand for essential medicines makes it a strong defensive choice. In the second quarter, HIV sales grew 12% year over year to $5.7 billion, and Biktarvy sales increased 7% to $3.8 billion. The company is also expanding its HIV prevention business, offering another area of growth in addition to its established treatment products. Gilead has opportunities beyond its well-known HIV treatments. In the latest earnings call, management discussed Trodelvy’s progress in cancer, Livdelzi’s role in liver disease, and updates from its broader research pipeline. These areas could help Gilead grow, but each one needs to be judged on its own commercial and clinical strengths.
The company's prevention business could also help drive growth. Management pointed to the launch of Yeztugo, a long-acting HIV prevention option, and noted that demand has been encouraging so far. If the launches go well, Gilead could see its revenue base expand, but the real impact will depend on how many people use these products and how much competition emerges in the future.
Overall, Wall Street analysts give Gilead stock a “Strong Buy” rating. Out of 30 analysts, 21 say it’s a “Strong Buy,” two call it a “Moderate Buy,” and seven rate it a “Hold.” The average target price is $158.86, suggesting the stock could rise 3.4% from its current level. The highest target price is $184, suggesting a possible 20% increase over the next year.
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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