When it comes to growth stocks, much of the attention often centers around tech. But there are potentially much better options out there for investors in other sectors, such as healthcare. While there may be doubts about the demand for artificial intelligence and how much of a payoff there will be from investments in that area, healthcare is one sector where there is undoubtedly going to be strong demand for companies to continue to develop new and more effective medicines.
That’s why one stock that may be a particularly intriguing investment right now is Sanofi (SNY). This is a growth-focused company that trades at an incredibly low valuation. Here’s a closer look at the healthcare stock, and why it may be a no-brainer buy for long-term investors.
Why Sanofi may be an underrated growth stock
At a market cap of just over $100 billion, Sanofi isn’t a small healthcare company, but it’s also not among the largest ones, either. The company focuses on developing treatments for hard-to-treat diseases, which can set it up for some attractive growth opportunities down the road. Its pipeline features more than 75 projects, with 34 of them being in late stages (phase 3 or waiting for approval). This includes Tzield, a treatment for type 1 diabetes that has shown that it can delay its progression.
During the first quarter of 2026, Sanofi’s sales rose by nearly 14% when factoring out the effect of foreign exchange. Its leading drug, Dupixent, was a key growth driver with its sales increasing by nearly 31%, but investors may be concerned about the company’s dependence on the drug, with it potentially losing patent protection early next decade. But with a significant pipeline and still many years to go before that may happen, Sanofi isn’t exactly in a dire situation. For the full year, the company projects a high single-digit growth rate for its top line.
The stock is incredibly cheap and pays a dividend
Despite its strong growth prospects and solid results, investors haven’t been buying up shares of Sanofi. It’s down 11% this year, and it has fallen by 19% over the past five years. It’s trading at a forward price-to-earnings multiple of less than nine (based on analyst estimates), which is much cheaper than the S&P 500 average of 22. Buying a stock at a low multiple can give growth investors a good margin of safety in the event that things don’t go as planned.
On top of it being a cheap stock to own, Sanofi also pays a yield of 5.7%, giving investors even more of an incentive to just remain patient with the stock.
— David Jagielski
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Source: The Motley Fool
