The two pharmacy giants are already playing a key role in vaccination against COVID-19. Walgreens Alliance Boots 09.30 NASDAQ: WBA i CVS Health (NYSE: CVS) help vaccinate residents and staff in long-term care facilities. They should have coronavirus vaccines in their stores to vaccinate the public in the next few months. In this Motley Fool Live a video taken on December 16, 2020, Health and Cannabis Office Chief Corinne Cardina and Fool.com writer Keith Speights talk about which of these pharmacy stocks with COVID-19 is currently the best offer to buy.
Corinne Cardina: Let’s talk about pharmacy stocks. Walgreens and CVS Health have signed an agreement with the U.S. government. They will be the ones who enter long-term care homes and give vaccines to residents and staff. Both of these pharmacy stocks have a poorer effect S&P 500 some time. What do you think of it as an investment? Do you think I can turn around? What do you think is the best purchase in a pharmacy, if there is one?
Keith Speights: Well I’ll say that, first of all, I’ve been a little worried about pharmacy stocks over the past two or three years because of the potential Amazon (NASDAQ: AMZN). It’s not just a potential threat. This is a real threat because Amazon has thrown its rings into the ring and they are competing in the pharmacy space.
I was especially willing, I would say, to Walgreens. Back in 2018, Walgreens ’CEO publicly stated that he wasn’t worried about Amazon’s competition because the internet giant bought PillPack, and PillPack is really small, and Walgreens’ CEO said, “Yes. They’re so small. Pharmacy companies are so complicated. No I worry about Amazon. ”I think I wrote an article at the time that he had his head in the sand and I still think he did because you don’t overlook a terrifying competitor like Amazon.
My concern was that Walgreens in particular potentially overlooked that concern or at least publicly downplayed it. But I think both of these companies, Walgreens and CVS Health, understand that they have a real threat in Amazon.
But I think CVS Health is probably a better choice in that space because they’re not just focused on retail. CVS also has a large pharmaceutical benefits management department and they acquired Aetna, one of the largest U.S. health insurance companies. I think the diversification makes CVS Health an intriguing choice, because I think it will eventually allow them to eventually introduce some more innovative comprehensive health solutions.
I think CVS Health could be the winner and I think it will be able to hold up for the most part against Amazon because they also introduced home delivery and that kind of thing. So I think they are taking steps that will set them up to be able to withstand the onslaught or potential attack of Amazon in the coming years.
Corinne Cardina: Very good insight there.