You may be grateful for family, friends, and many other things this Thanksgiving. And if you invest over the long term, you might also be thankful for the resilience of some of your investments or what they've brought you over time.
With this in mind, now is the perfect moment to think of the future and buy stocks today that may eventually make you grateful you made that move.
What sorts of stocks am I talking about? Stocks that, just like the upcoming Black Friday shopping event, offer you bargain prices today. Let's check out two to add to your portfolio right now that may offer you reason to cheer year after year over the long run.
Image source: Getty Images.
1. Alphabet
Most of us rely on Alphabet (GOOG 0.56%) (GOOGL 0.66%) on a daily basis -- every time we "Google" something on our phone or computer. The parent company of the leading search engine generates revenue by selling ads to companies that aim to reach us as we search on the platform. Alphabet also makes money by selling YouTube ads, offering cloud computing services, and selling hardware.
All of this has translated into a solid earnings track record for Alphabet, with earnings, free cash flow, and return on invested capital growing over time.
GOOG Net Income (Annual) data by YCharts
And there's reason to believe this growth can continue well into the future, thanks primarily to Google's dominance in the search market -- and efforts today to keep itself in the lead.
First, let's talk about the company's market share, which has steadily remained at more than 90%. This could continue simply because we're all used to "Googling" things, so we won't easily switch to another search engine.
But Alphabet isn't just counting on that and instead is working to make search better and better -- giving us a concrete reason to keep favoring it. The company is doing this through investment in artificial intelligence (AI), with the goal of this technology delivering richer, better search results. This should keep us searching on Google and offer advertisers an ongoing reasons to keep spending their ad dollars on Google Search ads.
Finally, Alphabet's cloud business isn't the biggest in the world, but it has continued to grow in the double digits and serves 60% of the world's 1,000 largest companies. So, it represents a top catalyst for earnings and share price growth over time.
How much do you have to pay for this market giant? A lot less than you might expect. The stock is trading for only 24 times forward earnings estimates right now, which looks like a steal considering Alphabet's track record, search market dominance, and future prospects.
2. Pfizer
Pfizer (PFE 6.09%) hasn't been very popular with investors in recent times for two reasons. The company is facing a decline in revenue from its blockbuster coronavirus products: vaccine Comirnaty and treatment Paxlovid. And some of Pfizer's other billion-dollar products are set to lose exclusivity later this decade, which should lead to a decrease in their revenue.
Let's talk about the coronavirus products first. They helped the company reach an all-time record of more than $100 billion in revenue last year, but as we move toward a post-pandemic situation, revenue expectations for Comirnaty and Paxlovid have declined.
It's important to remember these products still may contribute billions of dollars annually to the top line, though, as a portion of the population seeks seasonal vaccines. So revenue will drop, but it won't disappear.
As for products losing exclusivity, Pfizer predicts this will result in $17 billion in lost revenue from 2025 through 2030. But before worrying, consider this: Pfizer aims to compensate for this loss and grow revenue further by launching 19 new products in a period of 18 months. It's already completed 13 launches, so it's well on the way to meeting this goal. This is one of the company's biggest streaks of product releases ever, which prompts me to say Pfizer may be heading into a whole new era of growth.
These launches plus a series of business deals in recent years could help Pfizer to reach $84 billion in revenue in 2030 -- this isn't including any potential coronavirus program revenue.
Pfizer today trades for 19 times forward earnings estimates, which looks cheap considering what this big pharma company may look like later this decade. Of course, the stock may not take off overnight because it will take some time for new products' revenue to grow -- and upcoming declines in older products' revenue still might push some investors away.
But over time, Pfizer could climb thanks to this portfolio of new products -- and that's something long-term investors will be grateful for.
