Healthcare is a non-negotiable sector, and smart long-term investors can find unparalleled opportunities. This deep dive reveals seven top-tier stocks, from telehealth disruptors to dividend kings, designed for enduring wealth creation, even with an initial investment of just $1,000.
The healthcare industry stands as a beacon of stability and consistent growth in any economic climate. Its indispensable nature, coupled with an aging global population and continuous innovation, makes it a prime hunting ground for investors seeking stocks to buy and hold for the long haul. Whether you’re chasing explosive growth, reliable passive income, or a blend of both, the healthcare sector offers a diverse landscape of opportunities.
At onlytrustedinfo.com, we believe in providing our community with the most comprehensive analysis for building generational wealth. We’ve scoured the market for healthcare companies with robust fundamentals, strong competitive advantages, and a clear path to sustained success. Here’s a look at seven companies that could form the bedrock of your portfolio for years to come.
High-Growth Innovators Redefining Healthcare
1. Hims & Hers Health (NYSE: HIMS): Telehealth Disruptor
Hims & Hers Health has quickly emerged as a leader in the burgeoning telehealth space, a sector rapidly reshaping how consumers access medical care. This consumer-facing brand offers online consultations and delivers prescription products for various conditions, including hair loss, erectile dysfunction, and obesity. The company’s subscriber count has exploded from 192,000 in Q2 2019 to over 1 million, demonstrating strong market adoption and a powerful growth trajectory, as highlighted by The Motley Fool.
Despite recent market jitters over its ability to sell GLP-1 products, which appear to be misplaced concerns, Hims & Hers continues to grow revenue at over 50% year-over-year. Achieving GAAP profitability sets the stage for substantial earnings growth. With a market cap of just $3.2 billion and trading at 68 times estimated 2024 earnings, it presents a compelling growth opportunity for investors willing to embrace a rapidly evolving industry.
2. Intuitive Surgical (NASDAQ: ISRG): Robotic Surgery Dominance
For those looking for a growth stock with a proven track record of market dominance, Intuitive Surgical is a compelling choice. The company pioneered robotic surgery with its da Vinci system in 2000 and has maintained its leadership position ever since. Its business model, often likened to “razor-and-blades,” ensures recurring revenue, with 84% of its total revenue in 2024 coming from replacement instruments for its systems—a significant increase from 71% in 2017, according to The Motley Fool.
While its forward earnings multiple of 76 might seem steep, Intuitive Surgical’s growth prospects justify the premium. The company estimates its current products and clearances target less than 35% of the 2.78 million procedures performed last year. With products under development targeting an estimated 22 million soft tissue procedures annually, the runway for growth is massive.
3. Vertex Pharmaceuticals (NASDAQ: VRTX): Biotech with a Strong Pipeline
Vertex Pharmaceuticals stands out as a biotech powerhouse, commanding a near-monopoly in treating the underlying cause of cystic fibrosis (CF), a rare genetic disorder. The recent FDA approval of Kalydeco, its most potent CF therapy, solidifies this position. Beyond CF, Vertex is expanding its reach with groundbreaking treatments like the gene-editing therapy Casgevy, which is in early commercial launch, and the non-opioid acute pain drug suzetrigine, awaiting FDA approval.
Vertex’s late-stage pipeline is robust, including therapies for diabetic peripheral neuropathy, APOL1-mediated kidney disease (inaxaplin), and IgA nephropathy (povetacicept). A potential cure for severe type 1 diabetes, zimiscecel, is also in pivotal development. Vertex’s ability to leverage its success in CF to expand into other high-impact areas makes it a strong candidate for long-term investors seeking innovative biotechnology exposure.
Dividend Stalwarts and Wealth Compounders
4. UnitedHealth Group (NYSE: UNH): Healthcare Ecosystem Giant
As arguably the largest and most influential player in the U.S. healthcare system, UnitedHealth Group offers a blend of capital appreciation and consistent dividend growth. While widely recognized for its health insurance offerings, its Optum unit provides a broad range of services, including care delivery, prescription management, and data analytics. Generating nearly $400 billion in annual revenue, UnitedHealth’s immense scale allows it to offer better products and services in the vast $4.5 trillion U.S. healthcare market.
Historically, UnitedHealth has been a phenomenal wealth compounder. A $10,000 investment at its 1984 IPO would be worth $52.1 million today. Management’s commitment to dividends is evident through 15 consecutive years of increases, with an impressive average annual growth rate of 21% over the past decade. This makes UnitedHealth a core holding for any long-term investor seeking both growth and a steadily rising income stream.
5. AbbVie (NYSE: ABBV): A Dividend King’s Resilience
Spun off from Abbott Laboratories over a decade ago, AbbVie has forged its own legacy as one of the best dividend stocks available. Its foundation was built on Humira, once the world’s top-selling drug. However, the company masterfully navigated the “patent cliff” with Humira’s expiration in 2023 by strategically acquiring new revenue streams like Botox (via Allergan) and developing blockbuster successors like Skyrizi and Rinvoq. This foresight cemented its sterling reputation, as detailed by The Motley Fool.
AbbVie boasts a dividend yield of 3.2% (as per Article 1) to 3.8% (as per Article 2) and has raised its dividend every year as a public company, extending its true dividend history to 53 consecutive increases, earning it the coveted “Dividend King” status. Analysts anticipate mid-to-high single-digit sales growth starting next year, ensuring continued robust dividend increases for an already generous payout.
6. Medtronic (NYSE: MDT): Nearing Dividend King Status with Innovation
Medtronic is a titan in healthcare technology, renowned for developing products across cardiovascular, diabetes, medical-surgical, and neuroscience focus areas. With over 190 active clinical trials and 43,000 active patent matters, Medtronic is an engine of constant innovation, having treated over 78 million patients globally. It holds a storied history of dividend growth, with 47 consecutive annual increases, placing it just shy of “Dividend King” status.
The company is actively repositioning for future growth by spinning off its diabetes business to focus on higher-margin areas and developing a new robotic surgery system. Despite Wall Street’s “show-me” attitude, Medtronic’s yield is historically elevated at around 3% (as per The Motley Fool), making it an attractive entry point for those seeking a reliable dividend stock with significant long-term potential as it nears its 50th consecutive increase milestone.
Turnaround Plays and Consumer Staples in Healthcare
7. Kenvue (NYSE: KVUE): Consumer Health with High Yield
Spun off from Johnson & Johnson, Kenvue now holds J&J’s former over-the-counter consumer brands, including Band-Aid, Johnson’s Shampoo, Aveeno, and Tylenol. As a consumer staples company, Kenvue benefits from strong brand loyalty in essential products. The stock has faced headwinds recently due to concerns surrounding Tylenol and pregnancy, which have pushed its dividend yield up to 5.5%, according to The Motley Fool.
While Kenvue is a relatively young public company, its portfolio of iconic brands suggests resilience. This negativity may represent an exaggerated emotional response from the market. For investors who appreciate a consumer-staples business with a high yield and a strong legacy from its former parent, Kenvue could be an intriguing, albeit uncertain, long-term play as it navigates its independent journey.
A Note on Pfizer (NYSE: PFE)
While not a primary recommendation for all long-term investors due to its current high-risk/high-reward profile, Pfizer merits discussion. It currently offers a lofty yield of nearly 7%. However, its dividend payout ratio is close to 100%, and the company has historically cut its dividend following major acquisitions (e.g., Wyeth), a risk present with its current acquisition of Metsera. Coupled with upcoming patent expirations, these factors make Pfizer’s immediate future uncertain.
However, for turnaround-oriented investors, Pfizer is one of the largest and most resilient drug companies globally. Its acquisition of Metsera demonstrates a proactive strategy to bolster its pipeline where internal development has lagged. If history is any guide, a dividend reset could eventually lead to renewed dividend growth. This stock is for those comfortable with higher risk in exchange for potential significant long-term upside in a pharmaceutical giant.
Building a Resilient Healthcare Portfolio
The healthcare sector offers a unique combination of defensiveness, innovation, and long-term growth potential. From the cutting-edge technology of robotic surgery to the steady dividends of pharmaceutical giants and the essential consumer products of newly independent brands, there’s a stock for every investment strategy. By focusing on fundamentally strong companies with clear competitive advantages, investors can build a resilient healthcare portfolio designed to deliver wealth for generations.
