Sanofi: One of the World's Greatest Stocks

Our search for great stocks from around the world led us to the French drug maker.

We went looking for the greatest companies outside the U.S. and came up with eight proven picks. Here's one of them: Sanofi (symbol SNY (opens in new tab)). To make the list, the businesses had to have U.S.-traded shares and be industry leaders. They also had to possess substantial financial resources to weather rough economic times. Finally, we sought companies that had significant catalysts to drive the next phase of their growth.

Read more about the case for investing in Sanofi below. Prices and related figures for U.S.-traded shares are as of August 23. Earnings estimates are for calendar 2016 and 2017, unless otherwise noted. Price-earnings ratios are based on estimated 2016 earnings, unless otherwise indicated. Also, take a look at seven more great stocks from around the world.


Headquarters: Paris, France

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Share price: $39.05

Market capitalization: $100.5 billion

Estimated earnings per share: 2016, $3.10; 2017, $3.05

Price-earnings ratio: 13

P/E ratio on 2017 estimate: 13

Dividend yield: 4.3%

The business: Sanofi ranks among the world's biggest drug companies. Its $39.4 billion in 2015 sales make it larger than U.S. giants Eli Lilly (LLY (opens in new tab)) and Bristol-Myers Squibb (BMY (opens in new tab)) combined. The 43-year-old company is a major name in drugs for diabetes, cancer and rare diseases. It also produces vaccines for illnesses such as typhoid and dengue, and it owns biotech firm Genzyme.

Track record: Like many of its drug-titan peers, Sanofi has suffered in recent years from rising competition from cheaper generic drugs and from new treatments. That has hurt Sanofi's biggest seller, the long-acting insulin Lantus. Rising sales of new Sanofi drugs for multiple sclerosis and rare diseases have partly offset other declines. But overall the firm's sales and profit have been stagnant for five years. The stock has dropped 17% over the past 12 months, back to 2012 levels, and that has pushed up the dividend yield to a hefty 4.3%.

Reasons to own it: Sanofi is aiming to reignite growth. In November 2015, it detailed plans to boost research spending, cut other costs and refocus some businesses. The company also highlighted the potential market hits already in its pipeline, with 18 new drugs or other products scheduled to be launched between now and 2020. Research firm Morningstar says strong sales in emerging nations, particularly of vaccines, are a major long-term plus. Sanofi also is sharply boosting its presence in over-the-counter consumer products (such as painkillers and cold treatments) by acquiring the consumer arm of German drug giant Boehringer Ingelheim. "Our long-term conviction in the pipeline as well as continued strength from vaccines, consumer and rare disease businesses further strengthens our confidence" in Sanofi's appeal, Morningstar says. For patient investors, this is a chance to buy low.

Tom Petruno
Contributing Writer, Kiplinger's Personal Finance
Petruno, a former financial columnist for the Los Angeles Times, is an independent investor, writer and consultant. He lives in L.A.