I’m not sure if we’ll be flying in personal aircraft like George Jetson in the next 20 years. And, honestly, I can’t predict whether AI will take away millions of jobs. However, one thing is certain: whether it’s in the next decade or the next century, healthcare products and services will always be in demand.
I believe the healthcare sector is a prime focus for long-term investors. Companies in this field have shown an amazing ability to adapt over the years, and there are stocks available that seem well-positioned for future success.
You don’t need to break the bank to start investing in healthcare. If you have about $500, here are two healthcare stocks worth considering for the long haul.
1. Abbott Institute
Abbott Institute (abt) has an impressive history, having been founded in 1888. Presently, it stands as one of the leading healthcare companies globally, with a market cap of $240 billion. You could buy two shares of Abbott for approximately $276, leaving enough from that initial $500 to invest in another stock.
This amount covers a broad range of medical fields. Abbott is well-known in the medical device sector, particularly with products like the Mitraclip Mitral Valve Repair System and the Freestyle Libre glucose monitoring system. They’re also a key player in diagnostics, offering tools such as the Alinity Family of Diagnostic Instruments.
In addition, Abbott leads the nutrition market with popular brands like Pediasure and Similac. Their pharmaceutical segment offers branded generic drugs, including synthroids for hypothyroidism, along with biosimilars and products targeting cancer and women’s health.
Abbott continues to innovate. The company projects revenue growth year-over-year and has a solid history of adapting. For instance, they recently gained the European CE mark for a new system treating atrial fibrillation and are conducting important clinical trials on a new intracoronary system.
Furthermore, Abbott is recognized as a dividend king, having raised its dividend for an impressive 53 consecutive years.
2. Abbvie
You might notice the similarity between Abbott and Abbvie (ABBV). That’s intentional. Abbvie was spun off from Abbott in 2013 and retained part of the parent company’s name.
Abbvie has built upon its parent’s success and has emerged as a substantial biopharmaceutical company with a market cap of around $328 billion. Last year, Abbvie reported revenues of $56.3 billion, a significant rise from just under $42 billion the year before. At around $185 per share, you could purchase one share of Abbvie along with the two shares of Abbott and still have some funds left.
What I find particularly impressive about Abbvie is its resilience. Earlier in 2023, they lost exclusivity on Humira, their top-selling product. Nonetheless, Abbvie was prepared for this setback, having invested significantly in R&D and making acquisitions to enhance their product pipeline.
Now, Abbvie’s lineup includes two successors to Humira, Rinvoq and Skyrizi, projected to collectively generate $31 billion in sales by 2027.
Another aspect I appreciate about Abbvie is its commitment to dividends. They not only inherited Abbott’s tradition but have also increased their dividend by a whopping 310% since the spinoff. The forward dividend yield stands at an impressive 3.51%.
Add to that, Abbvie’s stock is reasonably priced, trading at just 15.2 times the expected revenue. With Rinvoq, Skyrizi, and other developments on the horizon, the stock’s valuation looks increasingly appealing.
