Best Healthcare Stocks to Buy Right Now for Long-Term Growth

Stocks that perform well over the long run tend to have several traits, such as a large, growing market where they have a strong presence, solid financial results, and a competitive moat. Investing in companies that fit that description and holding onto their shares, through thick and thin, can often lead to outstanding returns. With that as a backdrop, let’s consider two healthcare stocks that seem to have what it takes to generate excellent long-term returns: HCA Healthcare (HCA +0.06%) and Abbott Laboratories (ABT +0.63%).

Image source: Getty Images.

1. HCA Healthcare

Even as longevity science is an increasingly active field, it seems likely that humans will continue to get sick and need medical care for the foreseeable future. In fact, the demand for it should expand in the next few decades as the world’s population ages. That’s where HCA Healthcare comes in. The company runs a diversified network of healthcare facilities across the U.S. It is a leading player in this niche and benefits from a strong competitive edge thanks to its being deeply entrenched in the communities it serves, and having established relationships with third-party payers – including government ones – in an industry with significant regulatory barriers to entry.

Expand

NYSE: HCA

HCA Healthcare

Today’s Change

(0.06%) $0.30

Current Price

$473.54

Key Data Points

Market Cap

$106B

Day’s Range

$470.08 - $475.85

52wk Range

$314.43 - $556.52

Volume

155K

Avg Vol

1.1M

Gross Margin

15.83%

Dividend Yield

0.62%

HCA Healthcare generally records consistent revenue and earnings, and over the past year, the stock has soared on the back of excellent financial results. The company also continues to implement a strategy that has allowed it to grow its market share over the long run, which includes investing in cutting-edge technology.

Although HCA Healthcare’s business is susceptible to legal and regulatory changes in the healthcare sector, including the risk that government programs will decrease reimbursement rates, potentially leading to lower revenue and margins, the company’s business has handled that threat well in the past and is well-positioned to continue doing so, given its significant exposure to private third-party payers. So, the stock could perform well and offer excellent returns to patient investors.

2. Abbott Laboratories

Abbott Laboratories has an impressive track record of innovation. The medical device specialist markets products physicians use to diagnose and treat their patients – and sometimes, products marketed directly to patients – across several therapeutic areas, such as cardiovascular health and diabetes care. Some of Abbott’s devices are among the leaders in their niches. These include the company’s FreeStyle Libre, a franchise of continuous glucose monitoring (CGM) systems. The FreeStyle Libre has excellent prospects, given CGM’s low penetration globally.

Expand

NYSE: ABT

Abbott Laboratories

Today’s Change

(0.63%) $0.65

Current Price

$103.32

Key Data Points

Market Cap

$178B

Day’s Range

$102.57 - $103.79

52wk Range

$100.88 - $139.06

Volume

106K

Avg Vol

11M

Gross Margin

52.72%

Dividend Yield

2.34%

Abbott’s future doesn’t depend on a single franchise, though. The company will likely continue developing and marketing newer, better products, as it has in the past, leading to improved financial results over the long run. Abbott Laboratories also benefits from an economic moat stemming from patents on its devices, which grant it some degree of pricing power, as well as its deeply entrenched footprint (and reputation) in the healthcare industry. Lastly, Abbott Laboratories is a phenomenal income stock. The company is a Dividend King, or a corporation with 50 (or more) consecutive annual payout increases. Abbott is another top healthcare stock to hold onto for the long haul.