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Is the wait finally over for the AstraZeneca share price?

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I was pleased to see AstraZeneca (LSE: AZN) shares pick up 4% on Thursday morning in response to third-quarter figures as I’ve always seen a return to growth as inevitable, and I’ve seen those investors waiting until it actually happened as missing a golden opportunity.

In fact, the AstraZeneca share price has gained 23% over the past 12 months while the FSTE 100 has lost 5%. And over the past two years, the faithful have seen their investments grow by more than 50% — even ignoring a dividend yield of 4% on top of that.

The latest update was headlined AstraZeneca Returns to Sales Growth, and that is a key milestone as product sales grew by 8% in the quarter at actual exchange rates and by 4% year-to-date.

Profits are still some way off returning to growth, mind, with operating profit in the quarter down by 26% and earnings per share falling 37% — but that was largely in line with expectations at this stage.

Fresh momentum

Chief executive Pascal Soriot spoke of “performance in the quarter and year to date showing what we expect will be the start of a period of sustained growth for years to come.” The company has been working to re-establish its drugs development pipeline in the wake of the loss of some lucrative patents a few years ago, but what does it have in the way of promising new blockbusters?

The company’s Tagrisso, Imfinzi, and Lynparza drugs for cancer are, in the words of Mr Soriot, “showing great promise,” as apparently are its Farxiga treatment for diabetes and its severe asthma candidate Fasenra. Those are all conditions which affect the wealthy (and increasingly couch-bound) Western world, and I see them as potentially very profitable targets.

Overall sales growth is perhaps not a very valuable long-term indicator at the moment, being heavily weighted to existing proven products. But the company’s oncology (cancer) division saw year-to-date sales growth of 47%, spearheaded by those three key drugs highlighted by Mr Soriot.

Wider world

Looking geographically wider, the emerging markets business accounts for the firm’s largest region in terms of product sales, and brought in a 13% gain in sales in the year so far.

A lot of that is down to China, which accounted for a 33% rise in sales with a 55% hike in oncology sales. That’s the world’s most rapidly growing major economy, and demand for treatments for third-world ailments is growing from a much smaller base than we currently see in the US and Europe.

What does this mean for Astrazeca as an investment prospect?

We’re looking at shares valued at around 20 times their currently forecast earnings per share, and that’s a significant premium to the FTSE 100‘s long-term average. But even after having been held steady for the past few years, dividends are still expected to yield between 3.7% and 3.8% this year and next.

Time to buy?

Analysts are predicting a rise in earnings per share of 11% in 2019. But a lot of investors will surely be wary of that considering the length of time we’ve been waiting to see the long-expected return to growth.

But as a long-term investor, I’m not fazed by short-term uncertainty. I see AstraZeneca as a solid long-term buy, for both growth and dividends now.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.