If you have $20,000 to invest, you could put it all in one stock -- or you could invest across several. I favor buying a few stocks that can each offer you something different. For instance, one may pay you a top-notch dividend, another may offer you a solid track record of earnings growth, and a third might promise the potential for enormous growth ahead.
Healthcare is the perfect place to look for the safety of earnings and dividends -- and the exciting possibilities of growth. How you decide to divide up your investment depends on your appetite for risk. If you're a cautious investor, you should favor dividend stocks and companies that have increased their earnings over time. If you don't mind risk, though, you might put more money into young growth stocks. Let's check out a list to consider.
1. AbbVie
AbbVie (ABBV -0.85%) is a stock you'll like for its earnings and dividend growth over time. We'll talk earnings first. The company sells blockbusters in areas that include immunology, neuroscience, aesthetics, and oncology.
Today, AbbVie's top immunology drug, Humira, is losing exclusivity, but the good news is AbbVie has two other immunology drugs set to compensate -- and extend growth. In fact, AbbVie forecasts that by 2027, Rinvoq and Skyrizi together may generate more than $21 billion in revenue. That would surpass Humira's peak revenue.
As for dividends, AbbVie has lifted its quarterly dividend by 270% since the first payment. Today, AbbVie pays an annual dividend of $5.92 per share at a yield of 3.66%. And AbbVie's policy of raising its dividend year after year suggests your passive income might grow over time if you invest in this top stock.
2. Intuitive Surgical
Intuitive Surgical's (ISRG -0.63%) superpower is its moat. The company is the leader, by far, in the robotic surgery market -- and that will probably continue for a very long time.
Why? For two reasons. First, robotic systems are million-dollar investments, so hospitals likely will stick with their investments rather than switch to other products. Second, most doctors train on Intuitive's da Vinci robot. It's likely they'll want to continue with a system they know well.
Over time, this has translated into earnings growth for Intuitive. Another thing to like about Intuitive is that it generates revenue by selling not only robots -- but also the disposable accessories and instruments needed for each procedure. And that equals recurring revenue.
Intuitive also has recently repurchased shares. That's a sign of confidence in its own business -- and should add to our confidence, too.
3. Moderna
Moderna (MRNA 0.42%) is one of those companies promising growth on the horizon. Yes, it's seeing a drop in demand for its coronavirus vaccine. But outside of the coronavirus program, Moderna has three candidates in phase 3 studies: vaccines for flu, respiratory syncytial virus (RSV), and cytomegalovirus (CMV).
Each has blockbuster potential and could reach commercialization within the next few years. In fact, Moderna aims to launch the RSV candidate early next year if the regulatory review goes well.
Coronavirus vaccine revenue also is set to bring in billions for Moderna -- even if at a lower level than in the past. The company predicts the market will follow that of the flu, with many going for annual boosters. Moderna is investing in its business right now -- from research to logistics. And all of that could pay off big in a few years. So now is a great time to hop on board.
4. CRISPR Therapeutics
CRISPR Therapeutics (CRSP -1.88%) has reached a very exciting moment. The biotech stock recently completed regulatory submissions in the U.S., Europe, and the U.K. for its first potential product. Exa-cel is a gene-editing treatment for two blood disorders: beta thalassemia and sickle cell disease.
Exa-cel could be a big step for CRISPR for two reasons. First, it represents revenue -- and a lot of it. The company will share with partner Vertex Pharmaceuticals. But exa-cel's blockbuster potential means it still could be a significant product, financially, for CRISPR.
Second, exa-cel uses CRISPR's gene-editing technology. An approval would be a vote of confidence from regulators. That bodes well for CRISPR's other candidates and could encourage other companies to license CRISPR's technology for their own uses.
CRISPR also has other candidates in the pipeline, including an immuno-oncology therapy that recently delivered positive data. So exa-cel could be just the start for this innovative biotech company.
