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

By Rachel Warren – Updated Sep 30, 2021 at 4:38PM

Key Points

  • Worried about the next market crash? High-quality healthcare stocks can stabilize your portfolio.
  • An investment in these two stocks could generate top-notch returns over the next 10 years.

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The best is yet to come for these top healthcare stocks.

The healthcare industry contains compelling stock choices for investors of all ages and trading styles. As a healthcare writer and investor in this area, I'm partial to this industry myself. With everything from household names to smaller clinical-stage companies, there's no shortage of options whatever your personal risk tolerance might be.

One of the things I love about healthcare stocks in particular is the fact that this industry can be highly defensive, meaning that regardless of what's happening with the economy or the rest of the stock market, established companies in this space generally garner a consistent stream of demand. This is great news for investors looking for ways to tap into stable portfolio returns in volatile or uncertain periods for the overall market.

On that note, here are two great healthcare stocks to consider buying right now that you can hold and keep adding to for many years regardless of what the market does.

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Image source: Getty Images.


If you weren't familiar with Pfizer (PFE 0.74%) before the pandemic, no doubt you are now. The pharmaceutical stock has been an unequivocal winner in the coronavirus vaccine race from a commercial standpoint. It was the first company to have a vaccine for the deadly virus achieve full approval from the U.S. Food and Drug Administration (FDA).

But its success hasn't stopped there. On Sept. 22, Pfizer announced that the coronavirus vaccine it developed with BioNTech, which is being marketed as Comirnaty, was also the first to receive an Emergency Use Authorization (EUA) from the FDA for the much anticipated, third booster shot. Currently, the EUA covers "individuals 65 years of age and older, and individuals ages 18 through 64 within certain high-risk groups."

And on Sept. 28, Pfizer announced that together with BioNTech it had submitted initial positive data to the FDA from a late-stage trial of Comirnaty that evaluated its safety and efficacy in children between the ages of 5 and 12. Management also said that it intends to submit a request to the FDA to authorize the vaccine for emergency use in this age group in the weeks ahead.

Pfizer is also working on other potentially groundbreaking treatments within the COVID-19 space. For example, the company announced on Sept. 27 that it was initiating a global phase 2/3 trial to study the efficacy of a novel oral antiviral candidate as a potential preventative treatment for individuals who live with someone who has contracted COVID.

Pfizer's scientific success is helping its financial results. In the first six months of 2021, the company reported that its revenue and net income increased by 68% and 53%, respectively, from the year-ago period. Overall, Pfizer projects that it will bring in nearly $34 billion from Comirnaty in 2021.  Considering its potential ahead -- along with other top-selling drugs in the company's portfolio, such as anticoagulant Eliquis and cancer drug Ibrance -- Pfizer looks poised to benefit from abundant tailwinds in the years ahead.

Investors who want to capitalize on that growth certainly have incentive to do so, particularly as the $43 stock currently trades at only a little over 10 times estimated 2021 earnings. And its dividend yield of 3.6% is just the clincher for this great healthcare company.

2. Vertex Pharmaceuticals

Drug maker Vertex Pharmaceuticals (VRTX -1.01%) has certainly garnered fewer headlines than Pfizer, but I believe it also deserves investor attention. Its shares are down more than 30% in the past year, but are still up over 100% during the past five years -- right in line with the S&P 500's gains during the same period.

Vertex's strength lies in its competitive advantage and the particular focus of its business. The company is one of the foremost contenders in the cystic fibrosis therapeutics market, an industry that a new report by Global Market Insights estimates will be worth nearly $27 billion by 2027. Vertex's top-selling medicine Trikafta is approved to treat more than 90% of people who have the condition.

Its product portfolio, which consists of Trikafta and three other medicines (Symdeko, Orkambi, and Kalydeco), are all CFTR modulators, meaning these drugs aim to deal with the source of cystic fibrosis. The condition occurs when there is a mutation in the CFTR gene. Right now, these four products are the only CFTR modulators that have been approved by the FDA, so Vertex certainly has a market edge over other competitors developing these kinds of drugs.

This has translated to immense financial growth. In the past decade, Vertex's annual revenue has risen nearly 340%. And in the first half of 2021, the company reported a 16% jump in revenue from the year-ago period to about $3.5 billion.

While the shares may be down currently (some investors reacted strongly when the company stopped developing two drug candidates for a rare genetic disease, alpha-1 antitrypsin deficiency), I believe the stock has significant long-term upside. Vertex's foothold on the cystic fibrosis therapeutics market, its burgeoning pipeline of candidates that span a wide range of rare diseases, and its steady balance sheet growth make the company a compelling investment to buy and hold for the long haul. Now may be a great time to snag this stock on the dip.

Rachel Warren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Stock Quote
$49.21 (0.74%) $0.36
Vertex Pharmaceuticals Stock Quote
Vertex Pharmaceuticals
$312.98 (-1.01%) $-3.18
BioNTech SE Stock Quote
BioNTech SE
$154.85 (-0.88%) $-1.38

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