Healthcare stands as one of the most resilient sectors, enduring the ebb and flow of economic changes with unwavering stability. This industry, vital for its life-saving drugs and devices, offers a safe harbor for investors looking to anchor their portfolios in necessities rather than niceties. As we navigate through varying market climates, investing in healthcare can be a prudent long-term strategy.
In light of this perennial need for healthcare services and products, let’s explore two top healthcare stocks that are promising additions to your investment portfolio before June draws to a close.
Intuitive Surgical: A Leader in Robotic Surgery
Intuitive Surgical, not widely known outside the healthcare and investment communities, has been making significant waves with its revolutionary suite of robotic surgical systems. The company’s flagship, the da Vinci surgical system, has been a pioneer in facilitating over 2.2 million minimally invasive procedures globally in 2023 alone. Since its inception, da Vinci systems have been used in around 15 million procedures, underscoring Intuitive Surgical’s impact on the medical field.
Interestingly, the bulk of Intuitive Surgical’s revenue does not come from the sale of these robotic systems but from the instruments and accessories that accompany the da Vinci systems. These tools, with their limited lifespan, necessitate regular replacement, creating a steady revenue stream for the company. Moreover, Intuitive Surgical enhances its client support with a diverse array of services, including software, training, and multiyear maintenance contracts.
The first quarter of 2024 witnessed the company’s revenue climbing by 11% year over year to $1.89 billion, highlighting the substantial $1.2 billion income from instruments and accessories. This period also saw a 54% increase in net income to $545 million, alongside a 14% rise in the installed base of da Vinci systems. With a robust operating cash flow and zero long-term debt, Intuitive Surgical stands as a compelling pick for healthcare investors.
Eli Lilly: A Pillar of Pharmaceutical Innovation
Eli Lilly, a stalwart in the pharmaceutical industry, combines the rarity of consistent dividend payments with innovative healthcare solutions. This company’s dedication to increasing its dividend payout, with a record stretching back to 1885, is emblematic of its reliability and commitment to shareholders.
Eli Lilly’s pandemic years have spotlighted the robustness of its portfolio. Drugs like Trulicity, Mounjaro, Humalog, and Jardiance have led the charge in diabetes management, while their cancer and psoriasis treatments, Verzenio and Taltz, respectively, have solidified their place in Eli Lilly’s revenue stream.
Mounjaro and its counterpart for weight management, Zepbound, have been standout performers, ushering in a new era for the company. The anticipation surrounding Eli Lilly’s potential breakthrough in Alzheimer’s treatment, donanemab, further exemplifies its commitment to addressing chronic health challenges and underscores the stock’s appeal for those seeking both income and growth.
Before Venturing Further…
Before proceeding with an investment in Intuitive Surgical, it’s important to conduct thorough research and consider a broad spectrum of investment opportunities. Although the healthcare sector presents a less volatile investment landscape, aligning your portfolio with your financial goals and risk tolerance remains paramount.
In summary, as we inch closer to June, aligning your investment portfolio with stalwarts like Intuitive Surgical and Eli Lilly could pave the way for robust growth and resilience. These companies not only promise steady revenue streams derived from essential healthcare products and services but also stand as beacons of innovation in the relentless pursuit of medical advancements.
