Want to retire a millionaire? Unless you’re one of the lucky few who can run a successful business or are born to wealthy relatives, the best path toward that goal will likely require decades of investment. Sho. By doing so, you can build up your nest egg through the power of compound growth. for you. Given enough time, a diversified portfolio of high-quality stocks can work wonders.
And what better place to find leading companies with decades of growth opportunity than in healthcare? Healthcare isn’t going anywhere, but it’s already a multi-trillion dollar industry in America. I am. With that in mind, here are three of the best healthcare stocks money can buy right now.
1. United Health Group
UnitedHealth Group (UNH -0.26%) is a large conglomerate with two main divisions. UnitedHealthcare provides health insurance and benefits to tens of millions of people in the United States and more than 2 million people in Latin America. The company’s Optum division provides healthcare and pharmacy services to more than 100 million people and provides technology services to hospitals and other healthcare providers.
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It generated more than $380 billion in revenue over the past four quarters. Its scale is a competitive advantage for UnitedHealth because it can deliver more value for less money, which helps it continue to gain market share. UnitedHealth is a huge company with a market capitalization of more than $500 billion, and it continues to grow. Analysts believe UnitedHealth can grow profits at an average annual rate of 13% over the long term. The company has also increased its dividend for 15 consecutive years. As long as the company doesn’t run into antitrust troubles, its stock is poised to continue delivering impressive returns.
2. Abbott Laboratories
Healthcare products company Abbott Labs (ABT 0.36%) has evolved over the years. The company spun off its main pharmaceutical business into AbbVie more than a decade ago, but the parent company’s stock still failed to deliver above-market returns. Today, Abbott Labs sells consumer health products, medical devices, testing equipment, and generic pharmaceuticals to emerging markets.
Abbott Labs is also a Dividend King, having increased dividends for 53 consecutive years, making it a favorite for investors looking to consistently increase returns from their portfolios. Currently, the company only pays out about half of its profits to dividends, so there should be plenty of room for growth in the future.
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Most importantly, Abbott is well positioned for long-term growth. Since spinning off AbbVie, the company has adjusted to growth trends in cardiovascular and diabetes care. On average, analysts covering the company believe the company’s earnings will grow 8% to 9% annually over the long term, and that dividends will boost investor returns by nearly 2%. Abbott probably won’t make explosive profits, but with years of steady returns in the 8% to 10% range from growth and dividends, he could reach life-changing wealth. be.
3. Eli Lilly
Pharmaceutical giant Eli Lilly (LLY 0.18%) may be the most explosive of the three stocks. The company has had big hits with Wegovy and Zepbound, GLP-1 receptor agonists prescribed for diabetes and weight loss, respectively. Total sales of all GLP-1 drugs worldwide reached about $40 billion last year, and some forecasters predict it could nearly quadruple to $150 billion annually by 2032. I’m doing it. Eli Lilly is one of the few pharmaceutical companies to have GLP-1 approved by the FDA. product. But Eli Lilly is much more than that. The company has a deep pipeline and broad portfolio, including numerous products with growing sales.
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Analysts believe Eli Lilly will achieve average annual revenue growth of 20% over the next three to five years. Long-term investors shouldn’t ignore Eli Lilly’s dividend potential either. The company has raised its dividend for 10 consecutive years. The current yield is just 0.6%, but the payout ratio is only 31% of this year’s expected earnings. Eli Lilly is poised for rapid growth over the next few years, so expect management to increase its dividend. This makes the stock a strong candidate with the potential for even higher total returns than the market.
Justin Pope has no position in any stocks mentioned. The Motley Fool has a position in and recommends AbbVie and Abbott Laboratories. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
