Most people won't get wealthy from the stock market overnight, and for the ones who do, sustaining those returns can be even more difficult. I'm a newer investor myself, and I didn't grow up surrounded by financial gurus. Because of this, one of the things I love most about writing about stocks is that I can (hopefully) help to demystify some of the most common misconceptions about investing. One misconception is that there's some secret to making money through the stock market.
In reality, the best way to generate and maintain great portfolio returns is to do two simple things: 1) buy excellent companies and 2) hold those companies for many years. Being a long-term investor takes patience, but it can also be incredibly rewarding over time.
On that note, whether you're newer to investing or a seasoned pro, here are two fantastic companies to consider buying right now.
1. Johnson & Johnson
Johnson & Johnson (JNJ -0.82%) is hardly going to be a new name, but this 135-year-old pharmaceutical company has plenty to offer long-term investors in the form of stability and a reliable dividend. The company has increased its dividend every year for almost 60 years, and is a member of the elite group of companies called Dividend Kings. The stock yields a healthy 2.6% based on current share prices.
With an exhaustive collection of household name brands in its portfolio (think Tylenol, Listerine, and Neutrogena), not to mention its stable of pharmaceutical products, Johnson & Johnson is well positioned to ride out a variety of market headwinds, and it's proven it can do so time and time again. Despite some mixed quarterly results in 2020, it still finished out the year with a nearly 2% increase in sales. And in the second quarter of this year, its revenue grew 27% year over year, with net earnings rising an incredible 73% from the year-ago period.
Johnson & Johnson isn't the type of stock you look to for swift share-price appreciation, but its history of consistently raising and paying out its dividend regardless of what's happening with the economy or broader market makes it a particularly attractive choice for income investors. In addition, the stock has generated a total return of nearly 240% over the past decade. While this still trails the S&P 500's total return of about 360% during the same period, it's none too shabby for a dyed-in-the-wool value stock.
If you haven't heard of Zoetis (ZTS -0.19%) before now, this is a stock you won't want to miss out on. Zoetis used to be a subsidiary of the pharmaceutical behemoth Pfizer, but it was spun off in 2013 and is now the world's top animal health company. Bear in mind, the global animal health market is expected to hit a valuation just shy of $49 billion this year, and as the market-share leader, Zoetis stands to snag a considerable portion of these revenues.
Zoetis's broad portfolio of animal vaccines, medicines, and other top-selling products are continually met with high demand from its diverse customer base, which includes everyone from pet owners to livestock farmers. This consistent need for quality animal healthcare products was evident in its most recent quarterly report, where management said that the company grew its revenue and net income by respective amounts of 26% and 36% year over year. Meanwhile, Zoetis has grown its annual revenue and net income by approximately 40% and 100%, respectively, over the past five years alone.
Since the company started trading publicly more than eight years ago, its stock has achieved share-price gains of more than 540%. In short, if you want to invest in the booming animal health industry, Zoetis is the way to go. With a clear foothold on this market and a robust track record of delivering both exceptional top- and bottom line growth, not to mention mouth-watering shareholder returns, there's plenty for long-term investors to like about this stock.