Get-rich-quick schemes are often nothing more than scams, or at the very least, they are highly unlikely to deliver. That's why many turn to the stock market to accumulate capital. Becoming richer by investing in stocks won't happen overnight, but with a patient approach -- and investments in the right companies -- it remains one of the best ways to generate wealth over time.
1. Abbott Laboratories
There are several reasons medical devices giant Abbott Laboratories is an excellent stock to buy. First, it has been around for a very long time. The company's history dates back to the late 1800s. Of course, that alone does not guarantee that it will have a bright future. But the fact that the company has been able to be highly successful for decades in the highly regulated healthcare industry speaks volumes.
Second, Abbott Laboratories has a diversified portfolio. The company markets dozens of medical devices and other kinds of products. What's more, Abbott has also built a solid reputation among the physicians and healthcare facilities that use its products. Brand recognition can be a powerful competitive edge.
One key area of growth for the company is diabetes care. Abbott Laboratories has a solid presence in the market for continuous glucose monitoring (CGM) systems thanks to its FreeStyle Libre franchise. CGM devices allow diabetes patients to automatically track their blood glucose levels throughout the day.
Rapid adoption of this technology is propelling sales of the FreeStyle Libre. For the first quarter, Abbott Laboratories' total sales grew by 13.8% year over year to $11.9 billion. Sales from its diabetes care segment increased by a slightly better 14.9% to $1.1 billion. The FreeStyle Libre franchise alone brought in $1 billion of revenue, jumping 20.4% compared to the year-ago period.
With a rising population of diabetes patients, this monitoring device will continue to make headway. Of course, Abbott Laboratories has other growth drivers, including the MitraClip, a minimally invasive option for the treatment of mitral regurgitation.
Last but not least, Abbott Laboratories is an excellent option for income-seeking investors. The company is a Dividend King, having raised its payouts for an impressive 50 consecutive years. It currently offers a yield of 1.67%, compared to an average of 1.37% for the S&P 500. Dividend stocks have historically outperformed their non-dividend-paying peers. Whether investors choose to keep the passive income from Abbott Laboratories or reinvest it automatically into the business, dividends are just one more way in which this top healthcare stock can make you richer.
Pfizer's financial performance last year was excellent, and it owes its success mainly to Comirnaty, the COVID-19 vaccine developed in collaboration with BioNTech. But good news abounds for Pfizer investors: During the first quarter, Pfizer's revenue came in at $25.7 billion, 82% higher than the year-ago period. Drugmakers of this size very rarely -- if ever -- deliver top line growth rates in the 80% range.
For context, Pfizer reported $41.7 billion in revenue in 2020. That means the company has already racked up more than half its 2020 revenue in a single quarter of 2022. Of course, COVID-related treatments, including Comirnaty and the Paxlovid pill, were the stars of the show. Sales of the coronavirus vaccine came in at $13.2 billion during the quarter, compared to $3.5 billion reported during the year-ago period. Paxlovid, which earned regulatory approval in late 2021, recorded $1.5 billion in sales.
However, the rest of Pfizer's pipeline seems to be struggling. Excluding its coronavirus lineup, the company's revenue increased by a meager 2% year over year. Even with this caveat, the future looks bright for Pfizer. That's because the success it has had in the coronavirus market will allow it to invest in the future. Pfizer currently boasts dozens of ongoing clinical trials that will help to eventually expand its lineup of drugs.
The company will almost certainly look to bolster its pipeline with acquisitions. In fact, it has done that already. In March, Pfizer completed its acquisition of Arena Pharmaceuticals in a cash transaction valued at $6.7 billion. Arena Pharmaceuticals is a clinical-stage company developing medicines for various immuno-inflammatory illnesses.
Some of Pfizer's products are still performing well. That includes anticoagulant Eliquis, whose sales in the first quarter jumped by 9% year over year to $1.8 billion. But in the next five years, we can expect the drugmaker to launch several new potential blockbusters. Pfizer is also an outstanding dividend stock, currently offering a yield of 3.31%. Investors can get both dividends and growth with this company. For investors focused on the long game, that's a good deal.