2 Healthcare Stocks You Can Buy and Hold for the Next Decade

Healthcare stocks aren’t necessarily the dazzling investments that technology companies or other growth-oriented stocks can be. However, one of the reasons I love investing in healthcare stocks so much is the fact that these companies tend to generate steady growth in a wide variety of markets. From pharmaceutical drugs to household brands, the products that these companies produce are the ones that people always need and use throughout the year.

And while healthcare stocks don’t always outperform the market, the combination of consistent growth, sustainable returns and dividends they often offer is an incredibly attractive combination for investors to consider. Let’s take a look at two of the best healthcare stocks you can buy now and easily hold for the next decade or more.

1. Bristol Myers Squibb

Bristol Myers Squibb (BMY 2.64%) holds the distinction of being the seventh largest pharmaceutical company in the world by sales. In 2021, the company collected $46.4 billion in total revenue, up 9% from the previous year.

Over half of the company’s 2021 revenue came from three of its best-selling products. These blockbusters are Revlimid (multiple myeloma drug), Eliquis (anticoagulant) and Opdivo (cancer drug). The three drugs alone delivered respective full-year revenues of $12.8 billion, $10.8 billion and $7.5 billion, representing increases of 6%, 17% and 8% compared to 2020.

But Bristol Myers’ impressive portfolio has many other sources of income to rely on, with a huge range of products including hematology, oncology and immunology drugs.

For example, the chemotherapy drug Pomalyst, which Bristol Myers added to its portfolio after acquiring Celgene in 2019, collected $3.3 billion in sales in 2021 alone, a 9% increase from the previous year. Another of Bristol Myers’ best-selling drugs, a monoclonal antibody drug called Yervoy, generated $2 billion in sales in 2021, up 20% year over year.

And over the past quarter, healthcare stocks boosted their top and bottom lines by 2% and 27%, respectively. Bristol Myers may not be a stock to turn to for lightning growth. However, its portfolio has faced consistently high demand, which has led to balance sheet growth as well as solid investor returns. Over the past three years, the stock has delivered a total return of nearly 50%.

All this being said, when you consider Bristol Myers’ above-average dividend yield (just over 3% compared to S&P 500average of 1.7%), this unstoppable healthcare stock is certainly worth considering for a long-term buy-and-hold position.

2. Johnson and Johnson

The previous stock may not be a household name, but Johnson and Johnson (JNJ 2.18%) it certainly is. With a company history dating back to 1886, a vast portfolio of consumer goods, pharmaceuticals and medical device products, and a track record of not only maintaining but increasing dividend payouts for six decades and more, it has more than several reasons to love this dividend king. The stock currently yields 2.7% for investors.

While the former stock is among the top 10 pharmaceutical companies in the world, Johnson & Johnson tops the list with the number one spot. The company recorded a staggering revenue of $94 billion in 2021 alone, representing a growth of nearly 14% over the previous 12-month period.

Net profits also increased by 42%. These top and bottom growth were fueled by respective sales increases of 4%, 14% and 18% in the company’s Consumer Health, Pharmaceuticals and Medical Devices segments.

Johnson & Johnson’s consumer health business sells well-known products such as Tylenol, Motrin, Benadryl, Aveeno and Listerine. The company’s medical devices segment makes everything from operating room instruments to plates and screws used in orthopedic procedures. And its fastest-growing segment, its pharmaceutical business, develops and manufactures products targeting everything from infectious diseases to pulmonary hypertension.

The company is preparing to separate its consumer health business from its pharmaceutical and medical device business next year, after announcing its intention to do so in late 2021.

If you were invested in Johnson & Johnson at the time of the separation, you will also be invested in the result of the separation, which will be two publicly traded, dividend-paying companies. While these businesses are certainly on very different growth trajectories, the products they make, whether they’re fever drugs or cancer drugs, all generate steady demand that doesn’t change with economic cycles.

How has Johnson & Johnson performed for investors? Well, over the past decade, the stock has generated a total return of 202%. That’s not too shabby, especially when you consider that the S&P 500 has delivered a return of 213% — just slightly above that — over the same period.

Johnson & Johnson is not a high-growth stock, but few large healthcare companies are. If you’re an investor looking for a safe company with a history of growth that has the products and competitive edge to sustain it into the future, and a solid dividend to boot, Johnson & Johnson could be an excellent addition to your long-term portfolio.

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