While healthcare stocks may not garner the same enthusiasm from investors as other higher-growth sectors, this space features a sizeable set of companies with attractive track records of returns across many types. from different markets.
In general, companies focused on healthcare tend to be more resilient to recessions and down markets, because consumers still need the products these companies sell, regardless of the economic environment at the time.
On that note, here are two top healthcare stocks that could make investors rich in 2022 — and beyond.
1. Johnson & Johnson
With a corporate history that dates back over 136 years and counting, Johnson & Johnson (JNJ 0.02%) has had its fair share of market and economic cycles. Nonetheless, the company has continued to grow and diversify its core business portfolio while delivering stable returns and portfolio growth to long-term shareholders over the years.
For medical devices used in everything from orthopedic procedures, to traumatic surgeries, to thoracic surgeries, to lifesaving drugs in disease areas ranging from immunology to oncology, to its extensive brand portfolio at everyday use, Johnson and Johnson’s business is not one that is going to be heavily impacted by changes in consumer spending or the broader market environment.
People will always need surgeries, vaccines, medicines and everyday household items, no matter what happens in the world or with the economy.
This bodes especially well for a company like Johnson & Johnson which has become a mainstay in the various markets in which it operates and enjoys such a high level of consumer awareness. Over the past decade, J&J’s revenue and net income have grown 40% and 92%, respectively, while the stock has generated more than 230% total shareholder return.
The upcoming spin-off of its consumer healthcare business from its pharmaceutical and medical device businesses may enable strong growth trajectories for each independent company (both of which will be publicly listed and pay dividends), and both of which may benefit long-term shareholders in the years to come.
With a dividend that pays 2.6% and Johnson & Johnson has grown every year for 60+ consecutive years, this healthcare stock is one you can buy and really hold forever.
2. Globus Medical
Globus Medical (GMED 2.30%) is a medical device company with a broad portfolio of products targeting musculoskeletal disorders. These products include surgical instruments used in highly delicate spine surgeries, implants used in hip and knee reconstruction, and its ExcelsiusGPS robotic navigation platform that can be paired with any medical system. imaging for various spine surgeries.
Globus Medical recently launched its Excelsius3D imaging system, which seamlessly integrates with the ExcelsiusGPS robotic navigation platform, and is designed to facilitate various types of 2D and 3D imaging for pediatric and adult patients. Although deployment of the Excelsius3D imaging system is still in its early stages, it may provide an additional sustainable source of growth for Globus Medical’s balance sheet in the years to come.
Last quarter, Globus Medical’s total net sales of $254 million jumped 11% year-over-year. Its net income was an increase of less than 1% over the prior year period, but totaled $47 million for the three-month period.
Over a longer period, the essential nature of the products and services that Globus Medical manufactures and markets has enabled it to show strong and sustained growth over the years. Over the past decade, its annual revenue and net income have increased by 150% and 100% respectively. The stock has also generated a total return of more than 500% for investors over the same period.
Long-term investors looking to bolster their portfolio in the current environment and beyond should definitely take a second look at this sustainable growth business.
Rachel Warren holds positions at Johnson & Johnson. The Motley Fool fills positions and recommends Globus Medical. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
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