As investors, we know that timing the market over the long run with success is not possible. Investors who take a long-term approach typically see the strongest returns. If you want to collect a decent amount of income without ever having to sell your holdings, consider buying these two healthcare stocks.
The first stock is from the robotic-assisted surgical device maker Intuitive Surgical.
For starters, this is a company that has installed more than 5,400 of its advanced da Vinci surgical systems around the world. Considering these da Vinci systems are pricey, ranging from $0.5 million to $2.5 million per system. On the other hand, once Intuitive Surgical locks in a customer, it keeps them in their robotic surgery sphere for a very long time.
What’s more impressive, Intuitive Surgical’s operating margins have the potential to get better over time. As the number of installed da Vinci systems increases, the percentage of higher-margin revenue in relation to total sales will also rise.
Finally, it’s important to understand that the company has only realized a fraction of its surgical potential. Sure, it’s the leader in gynecology surgeries and urology, but it’s only playing a small role in general soft tissue surgeries. Therefore, there’s a long runway for the company to take on market share.
Johnson & Johnson
The second stock you can buy is the Healthcare conglomerate, Johnson & Johnson. It may not be the growth stock anymore, but it’s still steady. In fact, the company is one of only two publicly traded companies to boast the AAA credit rating from Standard & Poor’s.
Three business segments, each of which accomplishes something that the others do not, makes J&J special. Firstly, there are consumer health products, which is the slowest growing but provides the most predictable cash flow. Another one is medical devices. And finally, there’s J&J’s pharmaceuticals segment that provides the juiciest margins. Each segment brings an important piece to the company.
In 2018, the company reported its 35th consecutive year of adjusted operating earnings growth. This places J& J among the most elite of Dividend Aristocrats. Regardless of whether the economy is booming or struggling, J&J’s adjusted operating earnings and dividends are motoring higher.