Editor’s Note: At Early Investing, we’re always researching opportunities outside the stock market. That includes private, early-stage startup equity and cryptocurrencies such as bitcoin.
We strongly believe that these kinds of early-stage opportunities are long-term investments that are essential for strengthening and diversifying your portfolio… no matter what stage of life you’re in.
So today, we’re looking at a similar long-term strategy within the stock market. Today’s article comes from our friend and fellow long-term investor Marc Lichtenfeld.
A firm believer in investing in sectors teeming with long-term fundamentals, Marc makes the argument that healthcare is a long-term play you want to make.
If Marc’s comments or strategies intrigue you, we encourage you to read more of his work. To learn more about his long-term plays that deserve a place in your portfolio, click here to sign up for Marc’s Wealthy Retirement e-letter.
– Cory Templeman, Managing Editor
Dear Early Investor,
I’m a long-term investor. Like Warren Buffett, I’d love to hold a stock forever. Even if that’s not likely, I do expect to keep a stock in my portfolio for five years minimum – preferably 10.
So not only do I look for great businesses, but I want to be invested in sectors with strong long-term fundamentals.
I can’t think of a stronger sector than healthcare.
Sure, technology is vital to our economy and is a source of growth. I like technology.
But can you think of a sector whose products will be more in demand over the coming decades than healthcare?
You may have heard this statistic: Roughly 10,000 people turn 65 every day.
One thing we know is that the older we get, the more healthcare we consume. Whether it’s doctor visits, prescriptions or artificial joints, older people and their insurance companies spend a lot on healthcare.
In fact, the average retired couple will spend more than a quarter of a million dollars out of pocket on healthcare. And Medicare and other insurances will spend a lot more.
It’s not an understatement when we say your health is the most important thing.
So it makes sense to find the best healthcare companies to invest in for the long term. And since I’m the dividend guy, I want these top companies to pay dividends as well.
Let’s take a look at a few different areas within healthcare for some ideas on where to make money over the long term.
Amgen (Nasdaq: AMGN) is a rare biotech in that it pays a dividend. It’s a blue chip biotech company that has been in business for 37 years and is very profitable.
Amgen has 16 approved products, including Xgeva for osteoporosis and bone cancer, Neulasta for boosting white blood cells during chemotherapy and Enbrel for rheumatoid arthritis.
Additionally, it has 31 drugs in clinical trials. Amgen is also working on six biosimilars, which are generic biotech drugs. Biosimilars could be big revenue generators as patients and insurers look for cheaper alternatives to expensive biotech drugs.
The stock yields 2.7%.
Though it still has pharmaceuticals in its product portfolio, Abbott Laboratories (NYSE: ABT) is focusing more on medical devices, diagnostics and consumer products.
Its consumer products division makes Ensure, a nutritional drink for adults that is often used to supplement patients’ diets.
Its vascular unit has a variety of drug-eluting stents, guide wires and other products.
And Abbott’s diagnostic tools are used in oncology, genetic testing and infectious diseases.
The company has been around for 125 years. The stock yields 2.1%.
Omega Healthcare Investors (NYSE: OHI) is one of my favorite companies in healthcare.
Omega Healthcare owns real estate that is leased by nursing homes and assisted living facilities. It’s important to understand that Omega Healthcare doesn’t operate the nursing homes; it is the nursing homes’ landlord.
It is expected that roughly one-third of all baby boomers will spend time in a nursing home or assisted living facility at some point in their lives.
Demand for beds in these places will be huge. Omega is poised to profit on this enormous trend.
The stock has a fat 8.3% yield and has raised its dividend for 15 years in a row.
Healthcare stocks should definitely have a place in your long-term portfolio. The “silver tsunami” is one of the most significant trends that will affect the markets and the economy over the next several decades.
These stocks and others will thrive as seniors spend more on feeling good and feeling better.
And you’ll feel great generating profits and dividends from these and other healthcare stocks.
P.S. I recently discovered one under-the-radar company with 19 patents on what I call the “Genesis Cure.” It could eliminate a total of 4,800 diseases and save millions of lives. To learn more about the Genesis Cure and the company behind it, click here now.