Aim for Perpetual Wealth Through Investment? Select These 3 Stocks for Long-term Ownership
Investing for the long term brings a distinct tranquility. It necessitates thinking in terms of decades rather than months or years. This mindset allows an investor to concentrate on outstanding businesses rather than market fluctuations. The best companies reward their shareholders by distributing their profits in the form of dividends. These high-quality stocks not only pay dividends but also consistently outperform their competitors, generating profits beyond their business requirements. For a reliable long-term winner and decades of passive income, consider investing in companies that consistently raise their dividends each year.
The healthcare industry is an excellent place to find such stocks due to its universal need. Let's explore two outstanding examples below.
1. Eli Lilly
The global pharmaceutical industry is a colossal $1.5 trillion market, and Eli Lilly (LLY -2.39%) is a leading player. With a diverse drug portfolio, the company addresses conditions in obesity, diabetes, neuroscience, immunology, and oncology. Lilly is particularly renowned for its GLP-1 agonists, which treat diabetes and obesity by slowing digestion and suppressing appetite. This is a significant growth market, projected to be worth $25 billion in 2024 and $55 billion by 2031.
Management anticipates Eli Lilly's company-wide sales to reach $58 billion to $61 billion in 2025, representing a 32% growth. Analysts estimate the company's earnings will grow by an average of 38% annually over the long term. Lilly invests between $6 billion and $12 billion annually into research and development, securing a steady stream of growth opportunities.
Currently, Eli Lilly's dividend yield is 0.6%. However, its dividend payout ratio is only a quarter of its rapidly growing earnings, suggesting years of substantial dividend increases, which can accumulate into substantial income over time.
2. Zoetis
An often overlooked niche within the healthcare industry is animal care, and Zoetis (ZTS -0.95%) dominates the sector. Zoetis is a global leader in vaccines, medicines, diagnostics, and other technologies for companion animals and livestock. The company benefits from two primary growth trends: the increasing demand for animal protein and rising spending on companion animals, especially among younger generations.
Since its 2013 IPO, Zoetis has grown revenue by an 8% annual rate. Despite its 1% yield, this dividend stock offers tremendous growth potential. Zoetis has increased its dividend annually since going public, and its payout ratio is still only 26% of its earnings. Analysts predict 8% to 9% annualized earnings growth over the long term, making it likely that investors will enjoy many years of double-digit annual percentage increases.
3. Kenvue
If you're looking for a higher dividend yield, Kenvue (KVUE 0.68%) delivers. Kenvue is a consumer health products powerhouse spun off from Johnson & Johnson in 2023. Kenvue's world-class brands, like Tylenol, Motrin, Aveeno, Neutrogena, Band-Aid, Benadryl, and more, should continue providing stable profits, generating steady dividend increases for investors.
Kenvue isn't growing as swiftly as Eli Lilly or Zoetis, but it offers investors a solid dividend income foundation. With a current share price dividend yield of 3.9%, and a well-padded 66% earnings-based payout ratio, Kenvue's analysts forecast annual earnings growth of about 5% over the long term.
These companies showcase a mix of stable dividend yields and growth prospects, making them attractive for long-term investors seeking reliable income and potential capital appreciation. However, it's essential to conduct meticulous research and consider other factors before investing.
Incorporating these words into new sentences from the text: The process of investing in these outstanding companies requires careful consideration of finance and money management. Over the long term, successful investing in stocks like Eli Lilly and Zoetis can provide substantial financial returns.
