Most investors won't get rich from the stock market overnight. However, a long-term investment in companies with strong businesses that deliver consistent portfolio growth through share price appreciation and/or dividends can help you achieve financial freedom and even build real wealth.
If you're on the hunt for stocks that fit the bill, you've come to the right place. We're going to take a look at two such companies in today's article -- one of the world's oldest and largest healthcare entities, and an e-commerce/tech/growth stock that just keeps exploding to new heights of success.
Whether your retirement is a few years or decades down the line, it's never too early or too late to invest in quality companies that can generate robust portfolio returns for the long haul. Let's dive right in.
1. Johnson & Johnson
Founded in 1886, Johnson & Johnson (JNJ 0.61%) has a long and distinguished history of making the essential medicines, consumer goods, and other products that people rely on and use in everyday life.
From well-known lines like Neutrogena, Listerine, and Johnson's, to household name products such as Tylenol, Motrin, and Benadryl, blockbuster immunology drugs like Stelara, Simponi, and Remicade, and top-selling oncology drugs like Darzalex, Imbruvica, and Zytiga, Johnson & Johnson's incomparable status as a healthcare giant and compelling brand authority make it a stalwart investment that you can buy and hold forever.
The company delivered an exceptional period of balance sheet growth in the most recent quarter on the heels of strong recovery from impacted demand it experienced for some of its products at the height of the coronavirus pandemic. In Johnson & Johnson's second-quarter report, management said that sales surged 27% year over year while net earnings popped by more than 73%. Johnson & Johnson also reported diluted earnings per share (EPS) growth just shy of 73% for the three-month period.
In addition to these stellar figures, the company generated strong double-digit sales growth in each of its core business segments during the second quarter -- 14% in pharmaceutical, 10% in consumer health, and 59% in medical devices -- compared to the year-ago period. Considering that Johnson & Johnson reported a healthy but far more modest rate of year-over-year sales growth in the first quarter (8%) preceded by about 1% overall sales growth in the full-year 2020, these robust signs of recovery bode well for future quarterly reports.
Shares of Johnson & Johnson are trading up by about 14% from the beginning of this year. The company hasn't historically been known for explosive jumps in share price. Rather, investors can realize consistent and more meaningful portfolio growth in the form of the company's rock-solid dividend, which yields about 2.4% at the time of this writing.
Johnson & Johnson has such an illustrious history of raising its dividend (58 years and counting) that it is one of a hallowed few stocks that made into the club of Dividend Kings. This makes the company an ideal pick for a long-term investor's portfolio and a meaningful addition to a basket of stocks that can help you build (and sustain) retirement wealth.
This stock needs no introduction. Amazon's (AMZN 0.24%) history of impressive share price gains and balance sheet growth is pretty much what investors have come to know and expect from the FAANG stock.
From the company's status as an e-commerce behemoth (as of this year, it's expected to control a 50% share of all gross merchandise volume generated by the U.S. e-commerce market alone), to its astronomical rise as the market leader of the global cloud infrastructure industry with Amazon Web Services, to its indomitable success in industries ranging from entertainment to tech, Amazon is an unstoppable force that keeps shooting for the stars and surpassing expectations both from consumers and on Wall Street.
With a single share running you more than $3,200, it's a beautiful thing that fractional share investing is becoming an increasingly commonplace option on top retail trading platforms. And shares of Amazon have appreciated by more than 320% over the past five years alone. For context, the S&P 500 has delivered gains of just a little over 100% during the same period.
Amazon's most recent quarterly report was simply a continuation of many quarters of exceptional growth. During the three-month period, the company reported that its net sales soared 27% year over year. In addition, it reported an even higher spike to its net income of 50% from the year-ago period.
If you're an investor who's short on time and wants to put your money into a stock that can provide sustained and above-average portfolio returns for many, many years to come, Amazon is a no-brainer stock to buy, hold, and keep buying more of.