As investors, it can be easy to get discouraged by the near-term machinations of what has been a volatile market and it has on the performance of your portfolio. However, when you're putting money into great businesses and keeping it there for at least three to five years (if not longer), even a year or more of volatility becomes less of a worry.
Long-term investors out there looking for the next great business to buy into are always looking for fresh suggestions to give further consideration to. Here are two incredible stocks for buy-and-hold consideration regardless of whether a bear market is still underway.
1. Teladoc Health
Teladoc Health (TDOC -0.07%) stock trades nowhere near the price it was 12 months ago thanks in large part to the market shying away from growth-oriented businesses that are unprofitable. But, there are a few reasons that long-term investors may want to consider digging beyond the surface and taking a second look at the telehealth giant.
For one, Teladoc is one of the leaders in the global telehealth industry, a space on track to be worth nearly $460 billion by 2030. In 2022, Teladoc's total revenue grew 18% year over year to $2.4 billion. That revenue total is up roughly 340% from the pre-pandemic total in 2019. The company's fast-growing mental healthcare business, BetterHelp, raked in more than $1 billion in revenue alone in 2022, up 41% compared to the full-year 2021. Adoption across a wide range of Teladoc's chronic care services also continues to grow, with 805,000 individuals enrolled in one of its chronic care programs as of the end of the fourth quarter of 2022, a 10% increase on a year-over-year basis.
The growth story of the telehealth industry was certainly accelerated by the onset of the pandemic and some of the growth Teledoc would be seeing in 2023 was pulled forward into 2021 and 2022. However, the need for a wide range of virtual solutions that promote greater access to quality healthcare is not shrinking just because the pandemic has eased. It's probably more accurate to say that the company has now entered a more mature stage in its growth story. Investors should expect its future financial reports to reflect that.
It's a tough operating environment across many industries right now, and Teladoc is not immune. It's one of many tech companies enacting cost-cutting measures like workforce reductions. The company also recorded three separate multibillion-dollar impairment charges in 2022 (about $13 billion total) to write down the cost of its prior Livongo acquisition. These figures were noncash and represented almost the entirety of Teladoc's net loss for the year.
Teladoc is still one of the largest companies in its industry, which has helped it expand its selection of virtual care services. That has the company poised to benefit from the broad and growing addressable market it serves. The company is making headway in markets with untapped potential like chronic care while growing its suite of primary care solutions.
Investors with a well-diversified basket of stocks may find that this healthcare company makes a wise addition to a long-term portfolio even in a bear market, given the considerable runway for growth it still appears to have.
2. Costco
Members-only big-box retailer Costco Wholesale (COST 0.17%) has seen its share of market storms over the years and come through every time. Over the past decade, the stock delivered a total return of nearly 470% thanks to revenue and earnings growth of 116% and 187%, respectively. The regular $0.90 per share per quarter dividend currently yields a little less than 1%, and it has been boosted 190% over the past 10 years. But there have also been periodic special dividends issued over the past decade totaling $22 per share.
Costco's resilience and ability to provide returns to its investors through economic thick and thin are due to a few key factors specific to how its business operates. Its warehouse club model gives club members access to a wide selection of name-brand and private-label items from groceries to clothing to electronics to home decor, all at discount prices. This is a compelling selling point for consumers in any market environment, but even more so in an uncertain economy with elevated inflation.
There's also Costco's membership-fee-based system, which is core to its business operations. The membership fees it charges make up a relatively small portion of Costco's overall revenue, but they account for much of the company's bottom line. In the most recent quarter, the company generated total revenue of $55 billion, while net income came in at $1.5 billion. Membership fee revenue for the quarter totaled about $1 billion. It closed out the quarter with cash and investments on its balance sheet in the amount of about $14 billion.
In its latest quarter, which took place in an uncertain economy with multiple headwinds, Costco's top and bottom lines grew by respective amounts of about 7% and 13% year over year. Even if a full-blown recession hits, the variety of retail segments and needs that Costco's business covers, from essentials like food and pharmacy items to more discretionary areas like electronics, help it perform even if specific segments don't do well.
Taken together, these elements bode well for Costco's financials and its investors stand to benefit regardless of the broader market's mood swings. This tried-and-true value stock is a no-brainer buy in the current market.
