Healthcare investors saw the sector lag behind the broader market last year. Yet, several stocks in the industry are being viewed as solid long-term holdings.
Three companies are specifically mentioned: Eli Lilly (NYSE: LLY), AbbVie (NYSE: ABBV), and Intuitive Surgical (NASDAQ: ISRG). For an investor with $5,000 to allocate, these firms are presented as worthwhile investments to retain.
Eli Lilly reached a valuation exceeding one trillion dollars last year, becoming the first healthcare company to do so. The drugmaker leads in the weight-loss market. Its compound tirzepatide, approved for weight management, diabetes, and sleep apnea, was the world's top-selling drug last year.
The company is also advancing an oral medication for diabetes and weight loss called orforglipron, expected to gain approval this year. Eli Lilly is building a supercomputer to potentially speed up drug development.
With $5,000, an investor could purchase four shares of Eli Lilly.
AbbVie's immunology portfolio includes the drugs Skyrizi and Rinvoq. The company also markets Botox. AbbVie maintained steady revenue and profits after the patent for Humira expired in 2023.
The company has raised its dividend payout for at least 50 consecutive years. $5,000 would buy approximately 23 shares of AbbVie at current prices.
Intuitive Surgical produces robotic-assisted surgery systems, notably the da Vinci system. The company's revenue and earnings are strong, and its installed base is growing. Hospitals face switching costs after purchasing and training staff on the da Vinci system.
Procedure volume is increasing, which drives sales of instruments and accessories. An aging global population is cited as a long-term tailwind. $5,000 can acquire about nine shares of Intuitive Surgical.
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