Even in a highly volatile market, resilient companies continue to report solid growth and offer promising future opportunities. While many stocks are down right now, that shouldn't discourage investors from taking positions in fantastic businesses that still can deliver returns over the long-term.
Here are two such "safe" stocks for investors to buy hand over fist right now.
1. Microsoft
Microsoft (MSFT 1.75%) is an industry fixture with cutting-edge software and hardware solutions that are in demand. That has helped the tech giant ride out choppy market waters. Over the last decade, Microsoft saw annual revenue and profits soar by 155% and 233%, respectively. During that same period, the company grew its cash from operations by 209%, while delivering a total return for investors of 982%.
Microsoft has diverse streams of reliable revenue, with two of the most notable being its Office productivity software and cloud infrastructure services. It's estimated that Microsoft controls about 45% of the global market for office productivity software, a space currently valued at $133 billion. And it gets 85% of all productivity software spending by the U.S. government.
Even if companies scale back on software spending in a tough economy (as evident in recent earnings reports), Microsoft has a diverse range of revenue and profit sources to rely on. One key driver for Microsoft is cloud infrastructure, with the company controlling 21% of this $217 billion space, second only to Amazon.
One of the most talked-about sources of potential growth in recent months has been its investment in Open AI's ChatGPT, which it recently integrated with its search engine to create the new and improved Bing. This upgrade of its search capabilities with cutting-edge AI technology could reap manifold returns over the long run. But as with any new technology, there's a learning curve; there are already reports about the moody and even belligerent tendencies of the chatbot.
I wouldn't buy Microsoft stock for the potential of ChatGPT alone. But with the company's rapid move into AI, its existing market-leading products, and its dividend (which yields an underwhelming 1% but has increased by 62% over the past five years), this is a blue chip stock that investors might be hard-pressed to overlook.
2. Eli Lilly
Eli Lilly (LLY 3.19%) is one of the largest pharmaceutical companies in the world by revenue, and its history stretches all the way back to 1876. It has a wide range of top-selling medicines in its portfolio, including diabetes drugs Trulicity, Jardiance, and Mounjaro, as well as cancer drug Verzenio. Its Taltz treats plaque psoriasis and psoriatic arthritis.
In the final quarter of 2022, sales of these five products alone totaled $4.3 billion. While the last three months of the year saw Lilly report a slight decline in revenue, this was primarily due to unfavorable year-over-year comparisons because sales of its COVID-19 treatments waned. Excluding these products, revenue in the final quarter of the year totaled $7.3 billion, up 13% from the year-ago period. Net income was $1.9 billion, a 12% increase year over year.
Looking back over a much broader period, Eli Lilly has a robust track record of growing revenue and profits while rewarding investors. The company has seen revenue and profits soar by 33% and 93%, respectively, over the last five years.
Its dividend currently yields 1.4% and has risen more than 100% over the last five years, for a total return of 343% in the same time span.
Lilly's portfolio of treatments for cancer, diabetes, pain management, autoimmune diseases, and other conditions gives it plenty of resilience even in a full-blown recession. Patients will still need these medicines regardless of the economy.
For investors seeking a steadily growing, profitable healthcare stock with a robust dividend to boot, Eli Lilly looks like a worthy choice for the long haul.
