It's great to own evergreen stocks that keep growing even when the economy is a mess and when consumer preferences are shifting rapidly. You can't predict the future, but placing a $2,000 bet on tried-and-tested businesses that have a history of maintaining their momentum will ensure that you'll have the best chance at getting richer as the years roll by.
In that vein, let's dive into a pair of very different healthcare companies that have the right mixture of resilience and dynamism to be profitable investments in the economic environment of today, as well as the one we might have tomorrow.
NASDAQ: ALGN
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1. Align Technology
It's a pretty safe bet that people will always want to feel more confident about their appearance, and that's why Align Technology (ALGN +4.35%) with its Invisalign tooth straighteners is set up to grow for years and years. Its products have a comparable function to familiar orthodontic interventions like braces, but they have the all-important advantages of being invisible as well as more comfortable for patients. Those two features are key, because people who would find braces too aesthetically displeasing or unpleasant to use might well be enticed by a barely noticeable straightener.
Align's product lets it capture growth from people who aren't willing to use competing solutions as well as people who would otherwise be getting braces. That's how globally, in 2021, Align held a 10% share of the new patient starts for orthodontics.
In more concrete terms, sales of its straighteners brought in more than $3.9 billion in 2021, with its annual revenue rising by 168% compared to the preceding three years. Plus, to help clinicians to fit and adjust its products, Align also sells imaging devices, accessories for the devices, and software packages, which as a group accounts for 18% of its revenue. That's another driver of growth, as it means the company's primary customers are obligated to make an investment in the support hardware before they can sell aligners.
While it's true that the ongoing global macroeconomic turmoil has led to currency fluctuations that are causing a flattening of its quarterly top line growth, those conditions won't last forever. Likewise, the market's distaste for growth stocks in the era of rising interest rates will eventually ebb. Once economic and foreign exchange factors stabilize, Align's commercial operations should continue to generate more profitable expansion over the long term, and that's one more reason why it's worth a $2,000 investment.
2. Abbott Laboratories
Whereas Align Technology focuses on worldwide sales of its core product and a few supporting items, Abbott Laboratories (ABT +0.39%) takes entirely the opposite approach. It has a huge number of healthcare products that it sells to a variety of customers, ranging from the hospitals buying its surgical sets for cardiac procedures to consumer-targeted baby formula.
NYSE: ABT
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The company also makes a plethora of diagnostic tests, including the popular BinaxNow rapid antigen tests for coronavirus infections, not to mention making a few medical devices too. So, it's highly diversified and constantly developing new products to address emerging areas of demand. That means it isn't such a big deal for the business as a whole if a competitor manages to make a better product in any single one of its segments.
Diversification is also a core reason why Abbott Labs can keep growing for decades, even in times like these when macroeconomic disruption abounds.Over the last 10 years, its trailing 12-month sales climbed by 418%, and in 2021 its top line exceeded $43 billion. What's more, its profit margin has risen considerably over the last five years, so its efficiency at developing and commercializing its products globally is increasing.
If all of the above isn't convincing enough to invest in Abbott, investors should recognize that it is also a Dividend King, meaning that the company has hiked its dividend for 50 years in a row. In other words, the forward dividend yield of around 1.8% doesn't quite capture the growth you'll likely get by holding its shares over a long period.
