Investing in stocks is one of the most accessible and reliable ways to generate long-term wealth for at least two reasons. First, equities are pretty much guaranteed in a general direction over several decades. Second, it is possible to start winning in the act, even with a relatively modest amount of money.
For those who have $200 to spend that isn’t saved for an emergency, let’s consider two health care stocks in that budget that are worth holding on to forever: Bristol Myers Squibb (NYSE: BMY) and Science of Gilead (NASDAQ: GILD).
1. Bristol Myers Squibb
Pharmaceutical drugs will always be in demand until we eradicate the disease, which is unlikely to happen anytime soon. However, a company that wants to remain a leader in the industry for a long time needs to be good at innovating and developing newer and better therapies. That’s what Bristol Myers did for a while. Last year, the drug manufacturer’s portfolio featured 10 drugs that generated sales of more than $1 billion.
Yes, 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. The portfolio of newer drugs is slowly, but surely, gaining steam. The best-selling of the bunch, Reblozyl, which treats anemia in beta thalassemia patients, 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 rose 82% year over year to $425 million. There are several other drugs in the Bristol Myers portfolio that are still generating strong revenue growth. And as Revlimid’s patent cliff effects fade, its top line is finally starting 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 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 plans that include a subcutaneous formulation of Opdivo. Furthermore, the Bristol Myers pipeline features dozens of programs. It has a long and successful history of innovation. Lastly, Bristol Myers is a solid dividend stock. The forward yield of 4.95% is also high S&P 500an average of 1.32%.
Bristol Myers has increased its payouts by almost 67% in the past 10 years. Dividends can help boost long-term returns on top of the reliable performance that Bristol Myers should provide. Bristol Myers shares changed hands for under $49 each. Investors can get four for $200.
2. Science of Gilad
Gilead Sciences is the market leader in HIV drugs, a title it has held for a long time. Biotech currently has the most prescribed HIV regimen in the US: Biktarvy. The revenue and market share of these drugs generally increase over the years. The second quarter was no different. Gilead’s total revenue rose 5% year-on-year to $7 billion – excluding the COVID-19 drug Velury, sales rose 6% year-on-year. Biktarvy’s revenue reached $3.2 billion, 8% higher than last year.
Johanna Mercier, Gilead’s chief commercial officer, said: “Biktarvy represents more than 49% of the treatment market share in the US. Despite its success in HIV, the rest of Gilead Sciences has not been attractive in recent years. If it were not for Veklury, its sales would have declined in many early pandemic quarter.
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 more than 50 – are in the field of oncology.
The drug maker’s plan to reduce its exposure to the still-strong HIV business has come to fruition. And in the long run, the company’s ability must remain successful. Gilead’s dividend record isn’t bad either. Its payouts have increased by 79% over the past decade, and its forward yield is as high as 3.89%. That’s another reason to hold this stock well — at $79 a share, $200 gets you both.
Should you invest $1,000 in Bristol Myers Squibb right now?
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Prosper Junior Bakiny does not have a position in any of the stocks mentioned. The Motley Fool has positions and recommends Bristol Myers Squibb and Gilead Sciences. The Motley Fool has a disclosure policy.
Win $200? 2 Healthcare Stocks to Buy and Hold Forever was originally published by The Motley Fool
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