Now is a great time to start investing or add to your holdings. Many stocks remain reasonably priced after last year's tough market.
At the same time, the market today offers us reasons to be optimistic about the future. Some stocks have started to pick up momentum. And the S&P 500 has even climbed more than 20% from its bear market low.
So, what sorts of stocks should you buy today? Market leaders, dividend stocks, young and up-and-coming players, and recovery stories all make good candidates. Let's check out five of the best ones to invest $20,000 in right now.
And if you don't have that much to invest, no need to worry. You still can pick up a few shares of each of these stocks with a smaller investment -- and set yourself up for potential gains down the road.
1. Intuitive Surgical
Intuitive Surgical (ISRG 0.59%) is the global leader in robotic surgery. And the fantastic news is it's likely to keep that top spot. Robotic platforms cost millions of dollars. So it's unlikely hospitals will switch to another system if they're satisfied with the current one. Most surgeons train on Intuitive's Da Vinci system -- and that's another reason the company probably will maintain its leadership.
The robotic surgery powerhouse has grown earnings into the billions of dollars over time. And the company has recently bought back shares, a sign that it's confident in the future of its business.
ISRG Stock Buybacks (Quarterly) data by YCharts
Another point that makes me bullish on Intuitive is the company's revenue model. Intuitive doesn't just make money when it sells a million-dollar robotic platform. It actually makes even more money annually through the sales of instruments needed for each procedure -- and services to maintain the robotic equipment. This means each robot sold or leased out represents recurrent revenue. And that keeps Intuitive's earnings climbing.
2. Johnson & Johnson
If you feel like generating income while you recline comfortably in a lounge chair by the pool this summer, I've got the perfect stock for you: Johnson & Johnson (JNJ -0.46%). The healthcare giant has a spot on the elite list of Dividend Kings. These are companies that have increased their dividends annually for at least the past 50 years.
Why is this important? It shows these companies are committed to rewarding shareholders. So, it's likely they'll continue along this path.
J&J pays an annual dividend of $4.76 per share, representing a dividend yield of 2.88%. That's higher than the average dividend yield for the pharma industry, according to data from the NYU Stern School of Business.
But you'll like J&J for more than just its dividend payments. The company has a solid portfolio of pharmaceuticals and medtech products. For instance, it has 12 medtech platforms that generate more than $1 billion in annual sales. This year, the company is spinning off its slower-growth consumer health business. That could lead to more growth for this pharma giant.
3. Axsome Therapeutics
You could consider Axsome Therapeutics (AXSM 0.27%) an up-and-coming player. The biotech launched its first two products last year: sleep disorder drug Sunosi and antidepressant Auvelity. Prescription trends are looking good for both. And Axsome expects these drugs to generate as much as $500 million and $3 billion, respectively, in total U.S. peak revenue.
But this is just the start of the Axsome story. The company aims to have six drugs on the market by 2025. That includes the two current ones, as well as treatments for narcolepsy, migraine, fibromyalgia, and Alzheimer's disease agitation.
And all of these potential products, plus two more the company aims to launch at a later date, could generate U.S. peak sales of as much as $11.5 billion. Axsome says it has the cash and borrowed funds to carry it all the way to cash flow positivity. Therefore, the company has the resources necessary to achieve its goals.
Of course, there's always the risk of a candidate failure in clinical trials. But if you can accept that risk, Axsome makes a solid investment -- with high growth potential.
4. CRISPR Therapeutics
While we're on the subject of up-and-coming champions, let's talk about CRISPR Therapeutics (CRSP 0.34%). The biotech company is awaiting regulatory decisions on exa-cel, which could become its first commercialized product.
A positive decision would be big for two reasons. First, it would represent a vote of confidence for CRISPR's gene editing technology -- a technology the company uses throughout its pipeline. Second, an approval would lead to the company's first product revenue. And revenue could be significant.
Exa-cel is designed as a one-time curative treatment for blood disorders sickle cell disease and beta thalassemia. Today, treatment options are limited. That, and the fact that exa-cel could cure patients, is likely to spur demand.
Even though partner Vertex Pharmaceuticals takes 60% of potential profits, at 40%, CRISPR still could win big. Regulators are set to decide on the sickle cell indication in December and on beta thalassemia in March.
CRISPR also is conducting a trial on its immuno-oncology candidate that could support a regulatory request. So, the company is in the early days of its growth story. This is an excellent time for investors to get in on the action.
5. Medtronic
Medtronic (MDT 0.62%) is in a bit of a transition right now. The medical device giant hasn't delivered much growth in recent years -- so the company is taking steps to change that. For example, it's streamlining certain processes and investing in its manufacturing and supply chain platforms.
This should help Medtronic build on what it's already created over time: a company with a solid portfolio of devices that deliver billions of dollars in earnings annually. This means Medtronic may be about to enter a new phase of growth.
At the same time, there's another reason to like Medtronic. The company has put a focus on an area that's attracting a lot of attention these days: artificial intelligence (AI). AI could transform healthcare -- and Medtronic, as an early adopter, could benefit. The company already is using AI in its devices to improve spine surgery outcomes and in endoscopy to better detect precancerous tissue.
All this means Medtronic's growth problems may soon be a thing of the past. And the company's transformation plan and attention to AI could make it -- and investors -- big winners over time.
