Royalty Pharma plc (RPRX)

Royalty Pharma buys the right to a share of sales of already-approved drugs — it researches and manufactures nothing.

A university or biotech that invented a drug receives royalties from whoever sells it. Royalty Pharma buys that future stream for a lump sum: the seller gets money today and sheds the risk, the buyer gets years of income without laboratories, factories or a sales force.

The portfolio is assembled so that no single drug decides the company's fate. The main risks lie elsewhere: patent expiry, which ends a stream on schedule, and competition for deals, which raises acquisition prices. Such a stock is better assessed as a portfolio of rights with known end dates than as a pharmaceutical company. Dividends are paid regularly.