The stock market may be taking wild swings at the moment, but not all stocks are experiencing such explosive movements. While investments like growth stocks have seen shares decline en masse, there are still stocks that are outperforming the broader market in the current environment.
I'm going to talk about two of them today. If you have $2,000 at the ready to invest in the stock market and leave in your portfolio for three to five years at minimum, you may want to consider adding one or both of these market-defying stocks to your buy list in the near future.
1. UnitedHealth Group: A healthcare giant
As the largest healthcare company in the world (yes, you read that right), UnitedHealth Group (UNH 0.45%) has been well-positioned to ride out the current macro environment, due both to the non-cyclicality of the industries it operates in and the diversification of its businesses.
UnitedHealth has two primary businesses: its insurance wing, UnitedHealthcare (which is also the largest health insurance company by revenue), and Optum, through which it offers a wide range of solutions, including pharmacy benefit management, consulting, pharmacy care services, healthcare products like chronic care and behavioral health services, and more. Through Optum Rx alone, the pharmacy care services segment of the Optum business, it fills approximately 1.4 billion prescriptions every year.
Demand for the products and services UnitedHealth offers to individuals and employers isn't dictated by the whims of the stock market or the economy at large. These are the products and services that people always need, regardless of what is happening out in the world, which is why this is such a dependable business for investors to consider for a long-term investment in the current environment.
In UnitedHealth Group's most recent financial report, total revenue jumped 13% year over year to $80.3 billion, while UnitedHealthcare and Optum delivered respective revenue increases of 12% and 18%. Meanwhile, its total net earnings rose 19% from the year-ago period, while the company closed the period with cash and cash equivalents of $24.6 billion.
UnitedHealth is also a faithful dividend payer that currently yields 1.3%. While the S&P 500 has delivered a total return of -15% over the past year, this stock has generated a total return of nearly 30% in the same period.
But we're long-term investors, so let's look beyond the past year. Over the past 10 years, while the S&P 500 has delivered a generous total return of nearly 207%, UnitedHealthGroup has outpaced that by more than fourfold, with a total return of 971%. Its dividend has also increased by nearly 680% over the past decade.
If it's a steady-growth business you're looking to buy and hold for many years, with a dividend to boot, UnitedHealth Group satisfies on all counts.
2. Colgate-Palmolive: A name as old as time
Few companies are more of a household name than Colgate-Palmolive (CL -0.65%). With a company history dating back more than two centuries, and a family of brands that -- apart from those referenced in its moniker -- include the likes of Murphy Oil Soap, Hill's Pet Nutrition, and Tom's of Maine, it's safe to say that this tried-and-true business has seen its fair share of economic cycles.
While the market has declined by double digits over the trailing 12 months, the stock is only down about 7%. Colgate-Palmolive is also a diligent dividend payer. Not only has it been paying a dividend since 1895 (yes, nearly 130 years), but it has nearly 60 years of consecutive dividend increases to its name. The Dividend King currently yields 2.7% for investors. And Colgate-Palmolive's dividend has increased more than 50% over the last decade.
In the most recent quarter, Colgate-Palmolive's total net sales rose 6% year over year, while organic sales popped by 9%. The company reported net income of $603 million for the three-month period, which, while nothing to scoff at, was down about 14% year over year. Still, the company closed the quarter with a healthy $858 million in cash on its balance sheet.
What's so compelling about a business like Colgate-Palmolive for investors seeking something of a safe haven in a market storm is the stable demand for the products sold by its various businesses. From deodorant to hand wash to toothpaste, the staples it sells are the very items people are always going to keep buying, even as they scale back on other purchases. In the recent quarterly report, management noted that the company controlled a 39.6% share of the global toothpaste market and a 31.3% share of the global manual toothbrush market.
While these numbers may not elicit much excitement from investors at first glance, it's worth pointing out that not only do each of these markets represent multi-billion-dollar industries, but out of Colgate-Palmolive's second-quarter net sales of $4.5 billion, $3.6 billion were generated by its oral, personal, and home care segment, of which these products are a key part.
While the company has had to increase prices for some of its products, and this has affected its bottom line (much like it has for others in the indsutry), this shouldn't translate to a significant decline over the long term. Colgate-Palmolive's products are the type that consumers buy in any environment -- bull, bear, or in between. Its robust brand authority and strong market position bode well for investors seeking to increase their passive income potential with a long-term position in the company.
