Every business and industry experiences ups and downs. What matters is that companies use their resources wisely to not only weather the storms but also emerge stronger. Focus on stocks with strong fundamentals that have the potential to go big in the long run.
The following three companies have been resilient in tough market conditions. Let's find out why their stocks are a good addition to your portfolio in 2023.
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1. Johnson & Johnson
Johnson & Johnson (JNJ -0.46%) has a vast presence in the global market with popular brands under its consumer and health segments. These include Band-Aids, Listerine, Neutrogena, and Tylenol.
But the company will spin off its consumer segment by the end of 2023 into a new company named Kenvue. With this separation, J&J intends to focus solely on its core pharmaceutical business. This segment manufactures a wide range of medications, including some high-performing immunology and cancer drugs. Pharmaceuticals alone generated $52.5 billion in sales in 2022.
Johnson & Johnson has been engrossed in lawsuits over talc baby powder for quite some time. It had formed a subsidiary, LTL Management, to shift the talc lawsuits there and later bankrupt the company to avoid hefty litigation costs. However, a court recently put an end to that move.
Investors might be concerned about the cost of these legal battles, yet the company remains highly profitable. In 2022, it made a net profit of $17.9 billion. With the spinoff, the company will be able to focus on its pharma segment, which is growing at a rapid rate.
2.Teladoc
Teladoc Health's (TDOC -2.40%) stock performance last year might not justify the argument that it is a resilient stock. But its business suggests otherwise.
During the pandemic, Teladoc was a standout performer because patients had no choice but to use telehealth services due to lockdowns. But as the pandemic subsided and hospitals reopened, investors began to question Teladoc's ability to survive in the post-pandemic market, which weighed on its stock price.
Although 2022 was a bad year for most businesses due to rising inflation, Teladoc's revenue and patient visits kept growing -- increasing by 14% to 4.5 million in its recent quarter alone. This runs counter to investors' concerns that telehealth patient visits will decline now that hospitals and healthcare are fully operational. Telehealth services are in high demand because they provide patients with less stressful medical consultations while also saving them time and money.
Teladoc's consistent effort to grow its business amid challenging macroeconomic conditions shows its potential to thrive in the long run. Due to the rising demand, management now anticipates fourth-quarter revenue to be in the range of $633 million to $640 million, with total visits between 4.7 million and 4.9 million.
Based on the company's projections, total visits for the 2022 fiscal year could be around 18.4 million to 18.6 million versus 15.4 million in 2021. We will know more about Teladoc's plans for this year when it releases its fourth-quarter results on Feb. 22.
If the company continues to weather the current storms, it has the potential to become a dominant player in the global telehealth and telemedicine market. This market is expected to be worth $285 billion by 2027 if it grows at a compound annual rate of 26.6%, according to the website MarketsAndMarkets.
3.Tilray
Recent challenges in the cannabis industry might tempt investors to avoid stocks in this sector. However, this is a fast-growing area that is just getting started. And Tilray Brands (TLRY 1.71%) might just be the only Canadian pot stock whose strategies seem to have played out right.
While its peers are struggling to be profitable, Tilray recently registered its 15th consecutive quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which came in at $11.7 million in its recent quarter.
Tilray made a smart move by merging with another power player, Aphria, in 2021. It enabled the company to capitalize not only on the Canadian market but also on the burgeoning European cannabis market, where Aphria already had a strong position.
It is well-positioned to enter the U.S. market, if and when federal legalization happens, thanks to strong partners such as SweetWater Brewing, Breckenridge Distillery, and Manitoba Harvest. Tilray's balance sheet remains strong, with $433.5 million in cash and marketable securities at the end of the quarter.
By 2030, the global cannabis market is projected to be worth more than $70 billion, growing at a compound annual rate of 14%, according to marijuana-market analyst New Frontier Data. Tilray has the potential to become a major player in the cannabis industry with its international presence if it continues to play its cards wisely.
Diversification is key to investing.
Teladoc and Tilray are growth stocks that could provide an excellent long-term return. But they do come with some risks. The healthcare and cannabis industries are both subject to market highs and lows, making them suitable for investors with a higher tolerance for volatility.
Adding a stable stock like Johnson & Johnson to your portfolio would be a good way to diversify and reduce risk. It is also a Dividend King, having increased its dividend annually for at least 50 consecutive years. With a dividend yield of 2.7%, which is higher than the S&P 500's average yield of 1.7%, J&J provides investors with regular passive income.
