If you have a budget of $250, consider investing in these two long-term healthcare stocks:
One of the benefits of the stock market is that it's not necessary to be a genius or a wealthy individual to take advantage of its wealth-building potential. A person with a moderate initial investment, such as $250, who consistently adds to their investment and keeps it invested for the long term, often sees significant returns, as long as they select the right companies to buy.
Selecting these "right" companies can be challenging, so let's discuss two companies in the healthcare sector that seem to be great long-term investments: Bristol Myers Squibb (BMY -1.41%) and Novo Nordisk (NVO -1.90%). Investing $250 in these healthcare leaders now could be a smart decision.
1. Bristol Myers Squibb
Despite facing some challenges in recent years due to patent expirations for some of its top-selling treatments, Bristol Myers Squibb is making a comeback. New drug approvals, combined with the continued success of older products, has resulted in improved financial performance. In the third quarter, the pharmaceutical giant's revenue grew by 8% year over year to $11.9 billion. While adjusted earnings per share decreased by 10% to $1.80, this was largely due to acquisition-related charges.
These challenges are not a concern. By efficiently managing patent expirations, especially for cancer medicine Opdivo and anticoagulant Eliquis, Bristol Myers Squibb has demonstrated its ability to navigate such situations. Its ongoing portfolio of new products and future pipeline, which includes several clinical trials and new compounds, ensure ongoing sales growth.
Moreover, as a income stock, Bristol Myers Squibb offers a forward yield of 4.3%, which exceeds the S&P 500's average yield of 1.2%. Over the past 10 years, the company has increased its dividends by almost 68%. With shares currently priced at about $57, an investor can purchase four shares with $250, with change to spare. Holding onto these shares for the long term would be a wise choice.
2. Novo Nordisk
Over the past five years, Novo Nordisk has outperformed due to its success in the diabetes and weight loss market. Popular products like Ozempic and Wegovy (both versions of semaglutide) have gained widespread popularity, boosting the Danish pharma giant's financial performance. In the first nine months of 2024, Novo Nordisk's net sales increased by 23% year over year to 204.7 kroner ($28.8 billion). Ozempic's sales reached 86.5 billion kroner, a 32% increase, while Wegovy's sales rose 76% to 38.3 billion kroner.
While these results are impressive, it's essential to note that Novo Nordisk has been the dominant force in the diabetes drug market for decades. A company doesn't remain at the top for that long without a proven track record of innovation, especially in its core therapeutic areas. Novo Nordisk has not slowed down, continuously developing new drugs and treatments, such as the recently approved once-weekly insulin product Awiqli. Additionally, the company has several diabetes and weight loss treatments in phase 2 and phase 3 trials. Beyond these areas, Novo Nordisk is working on novel drugs for Alzheimer's disease, Parkinson's disease, and hemophilia, among others. Despite growing competition in the weight loss market, Novo Nordisk should remain a leader, and its pipeline will continue to produce significant medicines over the long term.
At approximately $108 per share, investing $250 in Novo Nordisk would allow an investor to purchase two shares and still have money left over. The stock's long-term potential makes it an attractive choice.
Investing $250 in Bristol Myers Squibb as a moderate initial investment could potentially yield significant returns due to its improved financial performance and high dividend yield. Over the past 10 years, the company has increased its dividends by almost 68%.
The success of Novo Nordisk in the diabetes and weight loss market, with products like Ozempic and Wegovy, has boosted its financial performance over the past five years. Investing $250 in Novo Nordisk could allow an investor to purchase two shares and still have money left over, with the potential for long-term growth due to the company's strong pipeline and continuous innovation in its core therapeutic areas.
