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Got $250? 2 Healthcare Stocks To Buy And Hold Forever
One of the great things about the stock market is that one doesn't have to be a genius or a multimillionaire to take advantage of its wealth-building power. A person who starts out even with a relatively modest sum, like $250, then progressively (and consistently) invests more over time, and stays invested for the long term, will typically see their efforts yield significant returns -- provided they choose the right companies to buy.
But which ones are the "right" ones to invest in? Let's consider two companies in the healthcare sector that look like excellent long-term bets: Bristol Myers Squibb (NYSE: BMY) and Novo Nordisk (NYSE: NVO). If you have $250 to spare now, putting that money to work by investing in these healthcare leaders would be a great move.
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1. Bristol Myers Squibb
Though Bristol Myers Squibb has faced some challenges in the past few years due to the loss of patent exclusivity for some of its better-selling treatments, the drugmaker is bouncing back. Thanks to a string of new drug approvals, plus sales of older products that are still moving in the right direction, the pharmaceutical giant's financial results look good again. In the third quarter, Bristol Myers Squibb's revenue increased by 8% year over year to $11.9 billion. Its adjusted earnings per share declined by 10% to $1.80, but that was largely due to charges related to acquisitions.
That isn't anything to worry about. Though the company will face more patent expirations toward the end of the decade -- namely for cancer medicine Opdivo and anticoagulant Eliquis -- its recent results have shown that it is more than capable of managing them. In addition to its newer products that still have plenty of room for sales growth, Bristol Myers Squibb has a healthy pipeline with several dozen programs in clinical trials, including many new compounds.
Lastly, Bristol Myers Squibb is a solid income stock, too. At the current share price, it offers a forward yield of 4.3%, which compares quite favorably to the S&P 500's average of 1.2%. Management has boosted the payouts by almost 68% over the past 10 years. The company's shares are currently changing hands for about $57 apiece, so $250 would get an investor four of them with change to spare. Holding onto them for the long haul would be an excellent idea.
2. Novo Nordisk
Novo Nordisk has been on a tear during the past five years thanks to its work in the diabetes and weight loss market. Brands such as Ozempic and Wegovy (both of which are formulations of the same drug, semaglutide) have become household names. Strong demand for these medicines has driven the Danish pharma giant's financial results to new heights. In the first nine months of 2024, its net sales jumped by 23% year over year to 204.7 kroner ($28.8 billion). Ozempic's sales came in at 86.5 billion kroner, an increase of 32%, while Wegovy's sales rose 76% to 38.3 billion kroner.
Although these results are impressive, it's worth pointing out that Novo Nordisk has been a leader -- perhaps the leader -- in the diabetes drug market for decades. A company doesn't remain on top of a competitive market for that long by accident. Novo Nordisk has a proven track record for innovation, especially in its core therapeutic areas, and it's still at it.
The company recently earned approval from regulators in Europe, Japan, and China for Awiqli, a once-weekly insulin product. It has several candidate treatments for diabetes and weight loss in phase 2 and phase 3 trials. Beyond these areas, it's developing novel drugs it hopes will prove efficacious against Alzheimer's disease, Parkinson's disease, and hemophilia, among other conditions. Despite mounting competition in the weight loss market, Novo Nordisk should remain one of its leaders. And the company's pipeline can be expected to produce other important medicines in these and other areas over the long run.
That's why Novo Nordisk's shares are worth sticking with for good, and at about $108 apiece, investors can afford two of them with $250 and have some change left over.
Don’t miss this second chance at a potentially lucrative opportunity
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On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $338,103!*
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 16, 2024
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
