Several factors go into making a long-term investment so appealing. It is a technique that takes the pain out of accumulating money; just buy excellent businesses shares, and wait. Additionally, being passive in nature, this method is considerably lower-maintenance and allows you to devote less time to financial management. By sticking to a buy-and-hold approach, you’re less likely to attempt to time the market and therefore avoid huge capital gains taxes.
However, investors must be able to identify good investments if they want to be successful with this approach. Or else, they will leave money in poorly performing equities, and will therefore be exposed to capital losses. Many healthcare businesses provide great value to long-term investors. One great thing about a number of these companies is that they pay dividends, increasing your long-term returns even more.
Below, we have shortlisted healthcare stocks that have both the largest dividend yield and the best growth potential. Let’s go further into this.
When you take into consideration how many hospitals and healthcare providers are still using outdated systems, companies like Cerner Corp (NASDAQ: CERN) that integrate healthcare and technology present quite a valuable opportunity. The company has a long-term potential since it is a supplier of healthcare IT solutions, medical equipment, and remote hosting services, aside from being an S&P 500 member. The fact that Cerner is a large US federal government contractor also remains an indicator of the robustness of its products.
Cerner remains an excellent healthcare investment despite a meagre yield of 1.09% in dividends. This is due to a more-than-likely rebound for the business, alongside the fact that healthcare institutions are beginning to ramp up their IT expenditure as the effects of the pandemic slowly subside. All in all, here’s how we see it: Cerner has a solid lead in the EHR sector, with potential for significant growth outside of its core area of specialization, thereby making it one of the strongest strong buy-and-hold healthcare stocks.
For those adopting a buy-and-hold approach, identifying companies with significant market share in their sector is often the wisest course of action. UnitedHealth (NYSE: UNH) is a huge winner for investors who want to hold onto their investments for the long run. As a Fortune 500 business and a provider of critical healthcare goods and services, it is the biggest managed healthcare organization in the United States. The ongoing worldwide pandemic has shown just how critical it is to have health insurance, and as one of the well-established healthcare stocks, UnitedHealth Group is poised to become even larger in the foreseeable future as a result.
UnitedHealth Group possesses a diverse collection of companies working together synergistically to enhance overall performance. It also appears to be willing to make further acquisitions to bolster its integrated operations. As part of the corporation’s intentions to buy healthcare technology and data analytics company Change Healthcare for $13 billion, the firm stated its intention its health technology and analytics offerings. The business recorded $71.3 billion in revenue for the second quarter (15% higher than Q2 last year), and ranks amongst healthcare stocks with a bright future ahead as the job market picks up at a steady pace.
Eli Lilly and Company
Eli Lilly and Company (NYSE: LLY) is an excellent long-term investment for anybody looking for a great pharmaceutical company. With the business enjoying a secure position in the market due to the success of a number of prescription medicines for treating different diseases and disorders, investors may expect sales to continue to increase each quarter. With diabetes being hugely prevalent among Americans, that the company’s medication portfolio for countering the disease accounts for a major chunk of its revenue.
It is certainly exciting to consider the many new pharmaceuticals that Eli Lilly is working on that may result in unprecedented breakthroughs in healthcare. Verzenio, the firm’s medication has shown significant evidence for treating early-stage breast cancer. Meanwhile, an Alzheimer’s drug falling under Eli Lilly’s umbrella carries enormous clinical promise. For the last three years, the company has increased its dividend payment at a 14.23% CAGR, and has returned 1.25% as a dividend yield. A drop in the share price at this point represents a big opportunity for investors searching for a premiere pharmaceutical brand.