Here are the 6 Best American stocks for Australian investors in 2025!

Here are the 6 Best American stocks for Australian investors in 2025!

Eli Lilly (NYSE:ELY)

If you thought Novo Nordisk’s Ozempic would have all the market to itself…think again. On a market cap basis, it is more than twice the size of Novo Nordisk and is actually the world’s largest pharmaceutical company. Like Novo Nordisk, it has had a historical business aiding people with diabetes and obesity, but also has oncology, immunology and neuroscience drugs too.

The company made $34bn in revenue during 2023 and a $5.2bn profit, with its key revenue drivers being diabetes drugs Humalog and Trulicity. Eli Lilly has a drug called tirzepatide that regulates blood sugar levels and thus helps people with diabetes. In May 2022, it was FDA approved as an adjunct to diet and exercise to improve glycemic control in adults with Type 2 diabetes, under brand name Mounjaro. 18 months on, the FDA approved it as an obesity treatment, under the brand name Zepbound. Yes, the FDA has endorsed it as an obesity-killer.

The drug has been shown in a Phase 3 clinical trial to help people lose up to 52 pounds in 16 months – results unparalleled by any other drug. Zepbound is a GLP-1 agonist like Ozempic is, but it imitates a second hormone, called GIP, which – along with reducing appetite – may also improve how the body breaks down sugar and fat.

Eli Lilly is well positioned to make a mark in the weight-loss drug market. Being first to market will help it build trust and entrench loyalty. Remember that Ozempic is only approved for diabetes and not for obesity. Also, as a company with established facilities, Eli Lilly will be better positioned to meet demand through its existing facilities.

It also has the balance sheet to invest – it told investors in May 2024 it would invest US$5.3bn in a manufacturing plant in Indiana to expand the production of Zepbound, along with other medicines. And even before the investment, the ongoing supply squeeze has ended. It is not the company saying that, but the FDA which has taken Zepbound off the list of medicines with shortages, after nearly 2 years on the list.

The bad news is that Zepbound will cost consumers US$1,060 for a month’s supply and this may not be covered by insurance companies, let alone by Medicare. However, if it as effective as has been shown in the clinical trials, people will find a way to afford it – be assured of that.

Also, as a high-growth company, there is the risk investors may lose confidence in the company if growth slows down substantially. And the company, like Novo Nordisk, will need to deal with fake and compounded versions of its medications. In fact, it is already fighting lawsuits with med spas purportedly selling fakes.

 

Walmart (NYSE:WLMT)

Any Australian who has been to one can attest to the fact that it is no Coles or Woolworths. It is a Woolworths, Bunnings and Big W, all rolled into one – and that could well be an understatement.

Today, Walmart is the world’s largest company by revenue with over US$611bn generated in FY23. For comparison’s sake, Amazon generated just US$514bn, ExxonMobil made $413.7bn, Apple made $394.3bn. And Walmart has held this title for over a decade. The company employs over 2m people across the world, the bulk of whom are in North America. It has direct outlets or investments in several countries including the UK, China and several countries in Latin America.

But is there any growth left in it? Yes. Although it lost Round 1 of the eCommerce battle to Amazon, it is catching up. Walmart’s eCommerce sales are 13% of its sales and they have continued to grow over 10% in since the pandemic even though many other eCommerce company revenues fell. It crossed $100bn in eCommerce sales for the first time last year.

Walmart has several advantages over its peers including its logistics and store networks, its cash reserves, the fact that it is a ‘one stop shop’ as well as the mix of goods, both essentials that are purchased regularly and bigger ticket items purchased less frequently but are higher margin for the company. You see, people like to see goods before they buy them. And some may be paranoid about having a package stolen if it is just left at their home – thank goodness there’s Click and Collect.

Walmart is also building its own marketplace of third party sellers, just like one that Amazon has. Walmart has over 100,000 of these sellers and while this is behind Amazon’s 2m sellers, this could be a more important revenue stream going forward. Another way in which Walmart is competing with Amazon is with its Walmart+ membership program. For US$98 per annum (or $13 monthly), you get benefits including free delivery, early access to Black Friday sales, fuel savings and a Paramount+ Essential Plan.

Yet another innovation Walmart is working on is having EV chargers at its stores. It already has 1,300 fast-charging stations and plans to keep expanding the network.

 

Colgate (NYSE:CL)

Colgate is known in Australia primarily as a toothpaste company, but there is more to it than that. Named after the surname of its founder, it sells not just toothpaste but brands across pet nutrition, personal care and home care. It sells products ranging from Palmolive shampoo, to Hills pet-food, Ajax home cleaning products even an LED device that can remove 10 years worth of stains in just 3 days.

Of course toothpaste is important to it as it has a 42% market share, along with a 32% share in the manual toothbrush market. And it has market leadership because it keeps innovating with new versions that have a great impact on oral health than competing products. And it does not just sell consumer toothpaste but professional brands used by dentists.

We are optimistic about this company because it may be a great way to get exposure to the pet care market. Colgate is exposed to this area with its Hills Pet nutrition products. Although they only account for just over 20% of the company’s total sales, it is growing faster than any other segment. In the June quarter of 2024, it recorded $1.1bn in net sales, up 5.5% year on year. The company’s entire sales only rose by 4.5%.

The company anticipates further sales growth as it captures more of the market, having undertaken the purchase of brownfield facilities from other companies and building of its own facilities. Fortune Business Insights estimates that the market is worth US$246.7bn right now and will grow to US$368.9bn by 2030 – representing a CAGR of 5.92%. As many pet owners can attest to, pets can be like family members. So pet owners won’t be cutting back expenditure on their furry (or feathered) friends.

 

Sherwin-Williams (NYSE:SHW)

Theoretically, a paint company should only be growing at GDP. But it has managed to deliver a heck of a lot more for its shareholders. Sherwin Williams sells paint to 120 countries around the world. It has over 5,000 stores and branches of its own (roughly 4,200 of which are in the USA with 246 in Canada, 310 in Latin America and 86 in the Caribbean), 136 manufacturing and distribution facilities and it sells into 120 countries.

It evidently a great company culture – CEO John G. Morikis has only been in the hot seat since 2016 but has been with the company for nearly 40 years and worked his way up over time. It has very low turnover for a retail company because its staff are not your typical ‘check out chicks or guys’, they are essentially account managers for customers (particularly commercial customers that will keep coming back). Sherwin Williams has raised dividends for over 40 straight years, has huge control over its supply chains and has modest capex requirements.

You name any generation and their life moves will need paint of some sort. Baby Boomers are downsizing and/or moving to assisted living facilities. Gen X and millennials are upsizing, or perhaps buying homes for the first time. And fresh paint is one of the best ways to add value to it. On top of that, the balance between Professional and DIY is returning to the pre-COVID norm where the former segment was more dominant.

Sherwin Williams is well positioned to capture more than its fair share of the new market opportunity with its constant innovation, superior stores and customer service. Investors have been concerned about supply chain issues and cost increases for construction companies, but this company has been unaffected.

 

Abobe (NDQ:ADBE)

This is the company responsible for Photostop and PDFs. And so, outside the so-called Magnificant Seven stocks, Adobe (NDQ:ADBE) is one of the most well-known by investors, as well as the most-used.

The company has never looked back since it switched from perpetual licenses to a subscription model in the early 2010s. While there were some fears from Wall Street that it would permanently hit margins, and that subscriber numbers would be impacted – any short-term impacts were outdone by longer-term impacts. From there, other initiatives have driven increased adoption and margin expansion.

Recently, the company launched Adobe Firefly which creates AI-generated images. Over 70 million images were generated in the first month, and 8 billion to date. The legacy business has been going strong with 400 billion pdfs opened and 16 billion documents edited. The company claims that every 1 million documents signed through its software saves 105 million litres of water, 31,000 trees, and the equivalent of taking 2,300 cars off the road for a year—plus reducing costs by more than $7.2 million.

The company purports to have an overall TAM (Total Addressable Market) of over $200bn for its segments.

 

Atlassian (NDQ:TEAM)

The one that got away from the ASX. This company was co-founded in 2022 by a pair of uni graduates called Scott Farquhar and Mike Cannon-Brookes. The first two products were Jira and Confluence which enabled software developers to track issues and collaborate with one another.

Farquhar and Cannon-Brookes knew these products were needed and they could fill a hole in the market. The freemium model at the time enables a lot of people to start using it quickly. The company grew both organically and through M&A, particularly in 2007 when it bought Cenqua and in 2012 when it bought Hipchat.

The company made headlines in the past few years due to the founders’ side hustles, such as Mike Cannon-Brookes’ war on AGL Energy’s board and Scott Farqhar’s push to get his alma mater Cranbrook co-ed; plus a notable earnings miss in August 2024. The maker of collaboration and project management software has its fair share of clients, but has tough competition with Microsoft and Oracle, as well as a tough time getting existing customers to ‘upgrade’. Even when the customers say yes, the deals are taking longer to close than they used to. Farquhar announced earlier in 2024 he could be standing down as co-CEO, but would remain on the board.

Even though it is not profitable, analysts expect significant revenue growth over the next few years, even if it slightly behind the 20% that had been earlier anticipated.

 

 

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