Investing in stocks is one of the most accessible and reliable ways to generate wealth over long periods for at least two reasons. First, equities are pretty much guaranteed to be in a general northbound direction over several decades. Second, it is possible to start getting in on the act, even with a relatively modest sum of money.
For those with $200 to spare that isn't being saved for emergencies, let's consider two healthcare stocks within that budget that are worth holding onto forever: Bristol Myers Squibb(NYSE: BMY) and Gilead Sciences(NASDAQ: GILD).
1. Bristol Myers Squibb
Pharmaceutical drugs will always be in demand until we eradicate diseases, which likely won't happen soon. However, a company looking to remain a leader in the industry for a long time must be good at innovating and developing newer and better therapies. That's what Bristol Myers has done for a while. Last year, the drugmaker's portfolio featured 10 medicines that generated over $1 billion in sales.
True, some of them are losing steam. Revlimid, its former best-selling drug, has been facing biosimilar competition since 2022. However, Bristol Myers is slowly bouncing back from that important patent cliff. Its portfolio of newer medicines is slowly, but surely, gaining steam. The best-selling of the bunch, Reblozyl, which treats anemia in patients with beta-thalassemia, was approved in 2019. Last year, it racked up $1 billion in sales.
It is still moving in the right direction. In the second quarter, Reblozyl's revenue grew 82% year over year to $425 million. There are several other drugs in Bristol Myers' portfolio that are still generating strong revenue growth. And as the effects of Revlimid's patent cliff fade, its top line is finally beginning to grow at a good clip again. In the second quarter, Bristol Myers' revenue increased by 9% year over year to $12.2 billion.
Bristol Myers will face more challenges in the coming years. Two of its longtime growth drivers -- Eliquis, an anticoagulant, and Opdivo, a cancer drug -- will lose their patent exclusivity by the end of the decade. But the company has a plan that includes a subcutaneous formulation of Opdivo. Further, Bristol Myers' pipeline features dozens of programs. It has a long and successful history of innovation. Lastly, Bristol Myers is a solid dividend stock. Its forward yield of 4.95% is well above the S&P 500's average of 1.32%.
Bristol Myers has increased its payouts by nearly 67% in the past 10 years. The dividend can help boost long-term returns on top of the reliable performance Bristol Myers should already provide. Bristol Myers' shares are changing hands for just under $49 apiece. Investors can get four for $200.
2. Gilead Sciences
Gilead Sciences is the leader in the HIV drug market, a title it has held for a long time. The biotech currently boasts the top prescribed HIV regimen in the U.S.: Biktarvy. This medicine's revenue and market share have generally been on an upward path over the years. The second quarter was no different. Gilead's total revenue was up 5% year over year to $7 billion -- excluding its COVID-19 medicine Velury, sales were up 6% year over year. Biktarvy's revenue came in at $3.2 billion, 8% higher than the year-ago period.
Johanna Mercier, Gilead's chief commercial officer, said: "Biktarvy represents more than 49% share of the treatment market in the U.S. This was up almost 3% year over year, our 24th consecutive quarter of year-over-year market share gain." Despite its success in HIV, the rest of Gilead Sciences hasn't been as exciting in recent years. If it hadn't been for Veklury, its sales would have been in a slump throughout much of the early pandemic quarters.
Still, the company is currently ramping up its oncology business. In the second quarter, Gilead Sciences' oncology revenue increased 15% year over year to $841 million. More than half of Gilead Sciences' pipeline programs -- of which there are over 50 -- are in the field of oncology.
The drugmaker's plan to decrease its exposure to its still-strong HIV business is well underway. And in the long run, the company's ability should remain successful. Gilead's dividend track record isn't bad either. Its payouts have increased by 79% in the past decade, and its forward yield tops 3.89%. That's yet another reason to hold this stock for good -- at a price of $79 per share, $200 gets you two of them.
Should you invest $1,000 in Bristol Myers Squibb right now?
Before you buy stock in Bristol Myers Squibb, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bristol Myers Squibb wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $729,857!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 9, 2024
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb and Gilead Sciences. The Motley Fool has a disclosure policy.
