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2 Healthcare Stocks You Can Buy and Hold for the Next Decade


The healthcare industry is constantly growing, changing, and evolving, which will continue in the coming years. However, certain services within the sector will remain in high demand. For instance, medical facilities won’t become obsolete even with the rise of telemedicine, and the need for lifesaving drugs should only increase.

Among the leaders in these segments of the industry are HCA Healthcare (HCA -0.69%) and Johnson & Johnson (JNJ 0.21%). These two healthcare giants could be excellent long-term investment opportunities for the next decade. 

HCA Total Return Level data by YCharts

1. HCA Healthcare 

HCA Healthcare is a leading hospital chain company with operations throughout the U.S. Although there is plenty of competition, the company has grown its market share in the past decade and again during the troubled pandemic years. It held a 23% market share in 2011, which jumped to 26.5% at the end of 2019 and roughly 28% as of the second quarter.

To be clear, HCA Healthcare has faced troubles due to the coronavirus outbreak. Hospital admissions have been a roller coaster since the onset of the pandemic. The various waves of COVID-19 cases that followed the rise of new and more contagious variants of the virus also contributed to these dynamics.

In the third quarter, HCA Healthcare’s revenue decreased by 2% year over year to about $15 billion, with same-facility admissions declining by 1.5%. But during the period, non-COVID admissions jumped by 6.9%. The delta variant of the coronavirus was going around during the third quarter of 2021, which explains this discrepancy. 

HCA Healthcare’s third-quarter results were also impacted by Hurricane Ian in Florida, one of the two states (along with Texas) in which it generated 58% of its admissions and 51% of its revenue during the period.

Although it is worth keeping an eye on these short-term issues, they will do little to derail HCA Healthcare’s long-term plans. Just like in the past, the company will continue to invest in new technologies and facilities to allow physicians to care for their patients as well as possible, thereby attracting more medical workers, payers, and patients into its network. 

Once pandemic-related dynamics subside, expect HCA Healthcare’s revenue and earnings to move in the right direction. The hospital chain is positioned well to deliver solid returns to investors in the next decade. 

2. Johnson & Johnson 

Johnson & Johnson is changing and modifying its business. The company will spin off its consumer health segment by the end of the year, and it recently announced that it would acquire medical technology company Abiomed for $16.6 billion in cash.  The acquisition should help J&J strengthen its medtech segment and complement its pharmaceutical business.

Johnson & Johnson’s consumer health business has its strengths. It adds diversity to the company’s overall operations and offers famous over-the-counter brands that will likely remain popular for years. These include Tylenol, Aveeno, Listerine, and more.

However, this unit has been growing its sales at a lower rate than the other two segments. During the third quarter, Johnson & Johnson’s pharmaceutical, medtech, and consumer health divisions increased operating revenue by 9%, 8.1%, and 4.7%, respectively, from the prior-year period.

Further, Johnson & Johnson faces many lawsuits related to products in the consumer health segment. The shift in J&J’s business should enable a clearer path ahead.

Meanwhile, pharmaceutical business boasts a diverse and growing lineup of drugs across such areas as oncology, immunology, infectious disease, neuroscience, and more. J&J also has a solid pipeline, with several dozen programs that will help it expand its current portfolio of approved drugs.

The company’s medtech unit has a bright future as well. Beyond its recent planned acquisition in this area, Johnson & Johnson is looking to make a dent in the fast-growing robotic-assisted surgery market thanks to its Ottava surgical robotic system.

Overall, Johnson & Johnson’s business is strong enough to survive the challenging economic environment and continue rewarding shareholders in many ways, including its dividend. J&J is a Dividend King and has raised its payouts for 60 consecutive years, making it an excellent option for income seekers. That’s just one more reason to invest in this healthcare stock.



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