Investors have had a love-hate relationship with the stock market so far in 2022. Big declines early on made some market participants skeptical about the chances for another year of positive returns, but they also set the stage for bargain hunters to buy shares of favorite companies at low prices. As some worst-case scenarios have come off the table, major market benchmarks have recovered somewhat. Wednesday brought a pause in the latest uptrend, though. As of 11:30 a.m. ET, the Dow Jones Industrial Average (^DJI 0.67%) was down 60 points to 35,234. The S&P 500 (^GSPC 0.87%) dropped 22 points to 4,610, and the Nasdaq Composite (^IXIC 1.11%) fell 104 points to 14,515.
Even with the indexes falling, a couple of well-known blue chip stocks hit all-time highs today. Both companies have done a good job of getting through the COVID-19 pandemic over the past couple of years, and they both have substantial growth prospects with solid business models and fundamental strength. Let's take a closer look at UnitedHealth Group (UNH -1.98%) and Costco Wholesale (COST 0.84%) to see why they're rising to new heights on Wednesday.
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Looking healthy
Shares of UnitedHealth Group were up more than 1.5% Wednesday morning, bucking the broader market's downtrend. The health insurance giant and Dow Jones Industrials component has seen only a modest 4% gain so far in 2022, but the stock is up 37% over the past year and has more than doubled since early 2019.
UnitedHealth brings a lucrative combination of businesses to the table. Its core UnitedHealthcare unit offers health insurance plans to those seeking health coverage, bringing together networks of physicians and other medical professionals and then making healthcare available through government programs, employer benefits, and direct sales to individuals. Meanwhile, the Optum health services side of the business has grown a lot faster, using technology and data-driven insights to help improve health and wellness across its network.
Nor has UnitedHealth stopped trying to innovate. The company announced just this week that it would acquire home health services provider LHC Group in a $5.5 billion merger. Integrating LHC into Optum will expand UnitedHealth's reach in the fast-growing in-home care niche.
Healthcare expenses aren't going down anywhere, and that keeps UnitedHealth's business in high demand. Investors can expect further share-price gains for the healthcare giant in the years to come.
Shoppers still love Costco
Meanwhile, shares of Costco Wholesale were up almost 1%. The warehouse retailer has just barely eked out a year-to-date gain, but the stock is up 61% in the past year.
Costco has worked its business model to perfection, charging a modest membership fee to give shoppers the right to buy unlimited amounts of merchandise at its big-box warehouse store locations. That has allowed Costco to offer lower prices on its goods than its competitors while still being able to rely on its fee revenue to provide a solid and growing profit for the business.
The COVID-19 pandemic even helped Costco build out an important facet of its overall operations. The need to accelerate e-commerce capabilities led to a dramatic uptick in Costco's online ordering channel, and members were happy to gravitate there even as they have now returned to stores to shop as well.
Costco's long-term returns for shareholders have been outstanding, and there's every reason to think its success will continue. Indeed, for both Costco and UnitedHealth, all-time highs could be just the beginning.
