Some of the most experienced investors around (including renowned fund manager Neil Woodford) have long held the view that global economic growth will be sluggish as far ahead as the eye can see. That view appears to be on the mark with downgraded economic forecasts showing a humdrum outlook at best and a potential derailing of the post-financial-crisis recovery at worst.

In such an environment, companies in defensive sectors with relatively dependable earnings and dividends, can provide returns that are hard to come by in other areas of the market. Companies whose growth prospects will be largely determined by their own progress, rather than by the macroeconomic background, can also provide such returns.

Three companies that fit the bill, and which could be well worth buying today, are AstraZeneca (LSE: AZN), EMIS Group (LSE: EMIS) and OptiBiotix Health (LSE: OPTI).


Big pharma is a classic defensive sector, although a spate of patent expiries on a crop of the industry’s blockbuster drugs has rather masked the fundamental attractiveness of pharmaceutical giants and dampened their earnings and share-price performances in recent years.

AstraZeneca’s future is beginning to look brighter again as it deals with the loss of patent protection for star turns Nexium, Crestor and Seroquel. Earnings declines are bottoming out, and a promising pipeline of new products, and recent deals, including a majority stake in Acerta Pharma and the acquisition of ZS Pharma, are set to drive strong top-line and bottom-line growth from next year.

At a current share price of around 4,300p, Astra trades on 15 times forecast 2017 earnings and offers a healthy prospective dividend yield of 4.3%, which adds up to a good deal for investors, based on growth projections through to the next decade.

EMIS Group

EMIS is the UK leader in “connected healthcare software and services”, and is well-positioned for growth in a tough environment. Its technology enables clinicians to share vital information in healthcare settings from primary and community care, to high street pharmacies, secondary care and specialist services. The NHS’s perpetual battle to manage costs and improve efficiency provides a strong underpin for EMIS’s growth.

The company has been delivering regular annual top-line and bottom-line growth in double-digits, which is set to continue. However, the shares fell by as much as 16% early today following the release of the company’s year-end trading update. The annual consensus had been for 16% revenue growth for the year, but management said growth came in at 13%, having been held back by the timing of contracts within secondary care, and it also expects to report a partial (non-cash) impairment in goodwill for the division.

However, these negatives appear relatively minor. Overall trading was in line with management expectations, and the company has “maintained its customarily strong revenue visibility, order book and pipeline”. EMIS remains an attractive steady-growth story for all seasons. The shares have recovered somewhat from their early drop today, and the company appears a solid buy at 980p on 19.6 times forecast 2016 earnings with a prospective dividend yield of 2.4%.

OptiBiotix Health

OptiBiotix is very much one of those companies I referred to earlier, whose growth prospects will be largely determined by their own progress, rather than by the macroeconomic background.

This small-cap firm is valued at around £55m at a share price of 73p. It’s a life sciences business developing compounds to tackle obesity, high cholesterol and diabetes. The company has no revenues as yet, but its portfolio of patents on compounds that change the way that microbes in the body work and interact is receiving considerable interest from some big players.

There’s an option agreement on OptiBiotix’s cholesterol-reducing product “with a multinational consumer goods company” (rumoured to be US giant Procter & Gamble). Meanwhile KSF Acquisition, with whom OptiBiotix announced a commercial agreement last week, may not be quite as familiar a name as P&G, but a note at the foot of the announcement reveals that KSF is “an investee of Kainos Capital, with a responsibility for the SlimFast brand in the UK, Ireland and Germany”.

OptiBiotix’s products appear to have considerable promise, and if deals with the likes of P&G and SlimFast progress, this small-cap company should grow rapidly whatever the macroeconomic background.

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G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended AstraZeneca. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.