Investing in stocks is one of the most accessible and reliable ways to build wealth over the long term for at least two reasons. First, stocks are pretty much guaranteed to be generally headed north for several decades. Secondly, it is also possible to manage with a relatively modest amount of money.
For those with $200 to spare that isn’t saved for emergencies, we’re considering two health supplies worth keeping forever within that budget: Bristol Myers Squibb (NYSE: BMY) and Gilead Sciences (NASDAQ: GILD).
1. Bristol Myers Squibb
Pharmaceutical drugs will always be in demand until we eradicate disease, which is unlikely to happen anytime soon. However, a company that wants to remain a leader in the field for a long time must be good at innovating and developing newer and better treatments. This is what Bristol Myers has been doing for a while. Last year, the pharmaceutical manufacturer had 10 drugs in its portfolio with sales revenue exceeding one billion dollars.
It’s true that some people get wind of it. Revlimid, its former best-selling drug, has faced biosimilar competition since 2022. However, Bristol Myers has slowly bounced back from this important patent cliff. Its portfolio of newer drugs is slowly but surely building. The group’s best-selling Reblozyl, which treats anemia in patients with beta-thalassemia, was approved in 2019. It racked up $1 billion in sales last year.
It’s still moving in the right direction. In the second quarter, Reblozyl’s revenue grew 82% year over year to $425 million. Bristol Myers has a number of other drugs in its portfolio that continue to deliver 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 rose 9% year over year to $12.2 billion.
Bristol Myers faces more challenges in the coming years. Two of its long-time growth engines — the anticoagulant Eliquis and the cancer drug Opdivo — will lose their patent exclusivity by the end of the decade. But the company has a plan that includes a subcutaneous formulation of Opdivo. In addition, the Bristol Myers pipeline includes dozens of programs. It has a long and successful history of innovation. Finally, Bristol Myers is a solid dividend stock. Its yield to maturity of 4.95% is considerably higher S&P 500average 1.32%.
Bristol Myers has increased its payouts by nearly 67% over the past 10 years. The dividend could help boost long-term returns in addition to the solid returns that Bristol Myers should already be delivering. Bristol Myers shares change hands for just under $49. Investors get four for $200.
2. Gilead Sciences
Gilead Sciences is the market leader in HIV drugs and has held that title for a long time. The biotech currently has the best prescribed HIV treatment in the US: Biktarvy. This drug’s revenue and market share have generally increased over the years. The second quarter was no different. Gilead’s total revenue rose 5% year-over-year to $7 billion — excluding the COVID-19 drug Velury, sales were up 6% year-over-year. Biktarvy’s revenue reached $3.2 billion, up 8% from a year ago.
Johanna Mercier, chief commercial officer of Gilead, said: “Biktarvy has more than 49% of the US treatment market. This was up nearly 3% year-over-year, marking our 24th consecutive quarter of year-over-year market share growth.” Despite its success in HIV, the rest of Gilead Sciences hasn’t been as exciting in recent years. If not for Veklury, its sales would have been in decline for most of the early quarters of the pandemic.
However, the company is currently ramping up its oncology business. In the second quarter, Gilead Sciences’ oncology revenue rose 15% year-over-year to $841 million. More than half of Gilead Sciences’ pipeline programs, of more than 50, are in oncology.
The drugmaker’s plan to reduce exposure to its still-strong HIV business is well underway. And in the long run, the company’s ability should be successful. Gilead’s dividend record isn’t bad either. Its payouts have grown 79% over the past decade and it has a forward yield of 3.89%. That’s another reason to hold this stock for good — at $79 a share, $200 gets you two of them.
Should you invest $1,000 in Bristol Myers Squibb right now?
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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.
Do you have $200? 2 Healthcare Stocks to Buy and Hold Forever was originally published by The Motley Fool
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