If you have $5,000 that you can afford to invest, there are plenty of good options out there for you. But the safest approach is to invest in the long haul -- in businesses that have bright futures.
Abbott Laboratories (ABT -0.03%) and Palantir Technologies (PLTR 0.56%) are two suitable options for long-term investors. Their businesses are growing at impressive rates today and they don't look to be slowing down anytime soon.
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1. Abbott Laboratories
Healthcare giant Abbott Laboratories was a great buy before the pandemic and its business looks even better today. The company released its latest results on Oct. 20 and sales of $10.9 billion for the quarter ended Sept. 30 were up 23% over the same period last year. While diagnostics and COVID-19 test products were a big reason for the large spike in sales (that segment generated year-over-year growth of more than 48%), the company reported strong results across the board with its slowest-growing segment, nutrition, still up 10%.
The healthcare company is performing incredibly well and is on track to blow past last year's revenue of $34.6 billion as it already has sales of $31.6 billion through the first nine months of 2021. Plus, with multiple new products that the U.S. Food and Drug Administration has recently approved -- including Amplatzer Amulet for preventing blood clots -- Abbott is only adding to its portfolio.
On top of all that growth, Abbott is also a solid dividend stock, paying investors 1.5% annually -- slightly above the S&P 500 average of around 1.3%. Last year, the company boosted its dividend by a generous 25%. Given that its net earnings through the first three quarters of this year are more than double what they were a year ago, it wouldn't be surprising to see another solid rate hike before the end of the year. One more increase to the dividend would also make Abbott a Dividend King.
Whether you just want a safe dividend or a top business to invest in, Abbott Labs is a worthy investment to consider.
2. Palantir Technologies
Tech company Palantir doesn't pay a dividend, but investors likely won't mind given its attractive growth prospects. The company's analytics and data solutions utilize artificial intelligence to provide organizations with valuable decision-making information. And it has earned the trust of the government -- more than 60% of its revenue comes from a wide range of agencies and military customers such as the U.S. Army and the Centers for Disease Control and Prevention.
Commercial customers are also bullish on its software; for the second quarter ended June 30, U.S. commercial revenue grew 90% over the same period last year. And the number of commercial customers rose by 32%. All in all, through the first half of 2021, the company's revenue has totaled $717 million, which is a 49% increase from a year ago. Palantir expects that its business will grow by an annual rate of at least 30% through 2025.
The one knock on the business is that right now it isn't profitable. The company incurred losses of more than $1.2 billion over the trailing 12 months. However, that is skewed by the third quarter of last year when the company saw a net loss of $853 million, largely the result of $847 million in expenses due to stock-based compensation. In subsequent quarters, losses have been much smaller.
Investors will need to be patient with Palantir (especially if they're waiting for the company to turn a profit), but with the growth potential the stock possesses, this is another promising investment that long-term investors should consider adding to their portfolios.
