It can take several hundred dollars -- and sometimes much more than that -- to acquire a single share of some highly regarded corporations on the market. But not all promising stocks are that expensive. Indeed, some can be bought for the price of a few cups of coffee, making investing on a budget worth it.
So, if you have a bit of change to spare -- about $25 -- here are two stocks in that range that are worth buying and holding onto for a decade: Tandem Diabetes Care (TNDM -0.90%) and Teladoc Health (TDOC -2.40%).
1. Tandem Diabetes Care: $21 per share
Tandem Diabetes Care focuses on developing insulin pumps. The company's current lineup includes the t:slim X2 and the newly cleared Mobi Insulin Pump, which management calls "the world's smallest durable insulin delivery system." Despite this progress on the regulatory front, Tandem has been bruised and battered on the stock market over the past year, as its financial results haven't been as good.
The company's sales of insulin pumps have declined amid the challenging economy, leading to lower year-over-year revenue growth. But this isn't that surprising -- insulin pumps have many advantages over the daily injection alternative. Pumps are less painful and seem to result in better health outcomes. However, they tend to be more expensive.
TNDM Revenue (Quarterly YoY Growth) data by YCharts.
Still, the economy should recover in time, and in the next decade there will be plenty of room for Tandem to improve its financial results. The company's addressable market is vast. It estimates there are just over 8 million eligible patients in the regions where it does business, most of whom are still using injections. That number dwarfs Tandem's installed base of 437,000 users as of the end of the second quarter.
And while there are plenty of competitors, about half of Tandem's customers switched from another pump, indicating the company's ability to survive in this industry. Tandem's installed base has been growing at a good clip for years. It should continue doing so, especially once the economy fully rebounds.
Meanwhile, the company's newest Mobi device has some perks compared to the t:slim X2. It's up to 15% cheaper to manufacture, which should help lower the cost of goods sold and improve gross margins. And its cartridges are more than 20% cheaper, which will appeal to customers. That's not including its smaller size, another important selling point for some patients.
As Tandem's newest device gains traction, expect the company's top line to grow while it gets closer to profitability. The medical device specialist can deliver solid results in the next 10 years.
2. Teladoc Health: $19 per share
Teladoc Health is a leading telemedicine company that's still trying to recover from last year's downturn. It posted substantial net losses in 2022 due to non-cash impairment charges related to an acquisition. Things have been better on that front this year, but some investors remain skeptical. That's because Teladoc's growth has slowed substantially since the early pandemic years.
TDOC Revenue (Quarterly YoY Growth) data by YCharts.
But there is still hope for the company. Telemedicine is likely here to stay, given the convenience it offers patients and physicians. For the former, it allows them to get medical care without leaving their homes; all they need is an electronic device and a Wi-Fi connection. Doctors benefit by expanding the pool of patients they can consult, and by eliminating some of the costs typically associated with seeing every patient in an office.
Teladoc's ecosystem now includes 476,000 members of its BetterHelp therapy service, a little over 1 million within its chronic care unit, and almost 86 million integrated care members (which includes primary care services). The company is arguably building a network effect.
Recently BetterHelp has been one of Teladoc's most significant growth drivers. The company has aggressively marketed its mental care service, seeing an opportunity amid the global rise in depression and anxiety due to the pandemic. BetterHelp sessions are cheaper than typical on-site therapy visits, making them more accessible.
This unit should continue to grow, as will the rest of Teladoc's business, given the company's marketing efforts, growing name recognition, and the expanding telehealth market. Some analysts predict it will clock in a compound annual growth rate of 24% through 2030.
Meanwhile, Teladoc should continue to improve the bottom line. The company boasts gross margins well above 60%:
TDOC Gross Profit Margin (Quarterly) data by YCharts.
But high expenses, especially marketing and advertising, are eating up the bottom line. That will change as Teladoc becomes more established, which should happen well before 2032, so expect it to turn a profit within the next few years. That's one more reason Teladoc can deliver excellent results in the next decade.
