Many people make it a New Year's resolution to save more money, and to that end, investing in stocks isn't a bad idea. Putting your hard-earned cash in solid corporations with bright futures will help grow your initial capital. And while the healthcare industry may not be the most exciting, top companies that provide healthcare services often stand the test of time. After all, medical care is always in high demand.
With that said, let's look at two excellent healthcare stocks worth buying today: Eli Lilly (LLY +0.72%) and HCA Healthcare (HCA 0.31%).
NYSE: LLY
Key Data Points
1. Eli Lilly
Popular stocks aren't always great investments, but in the case of Eli Lilly, it certainly is. Last year, the biotech made quite a bit of noise thanks to its newly approved anti-obesity drug Zepbound, which looks destined for stardom. Zepbound first hit the market in 2022 in treating type 2 diabetes (it is marketed as Mounjaro in this indication). In addition to these two approvals, it is seeking many other label expansions, from obstructive sleep apnea to nonalcoholic steatohepatitis, among others.
Zepbound should help drive solid top-line growth for Eli Lilly for years, especially since it isn't the only new medicine the company will rely on. The drugmaker's portfolio has been getting quite the makeover lately, with brand new products such as cancer medicine Jaypirca, ulcerative colitis therapy Omvoh, and two more that should earn the green light relatively soon.
The first is lebrikizumab, a potential eczema treatment whose application for approval was declined last year. But since that was entirely due to manufacturing issues, Eli Lilly should be just fine here. The second is the drugmaker's investigational Alzheimer's disease therapy, donanemab, which reported excellent results in a late-stage clinical trial.
Eli Lilly's financial results should remain strong, just as they were last year, thanks to its incredible portfolio. In the first nine months of 2023, the company's top line jumped by 17% year over year to $24.8 billion, despite sales of its COVID-19 antibodies completely vanishing compared to the parallel period in 2022.
Analysts see Eli Lilly's revenue increasing at a rate of 28.7% per year for the next five years -- an incredible number for a biotech giant. Lastly, Eli Lilly is also a solid dividend stock. All things considered, the company's shares look attractive even after destroying the market in 2023.
NYSE: HCA
Key Data Points
2. HCA Healthcare
HCA Healthcare owns and runs a network of medical facilities, mostly hospitals. The company is one of the leaders in this field, with facilities that span most of the country, although it is particularly concentrated in Florida and Texas. HCA Healthcare's business was deeply affected by the pandemic in several ways.
First, occupancy rates in its facilities -- one of the critical determinants of the company's revenue -- fluctuated a lot and became somewhat unpredictable. Second, the healthcare giant had to rely on more expensive contract labor in the earlier days of the outbreak.
HCA Healthcare is slowly but surely leaving these problems behind, and the company performed pretty well last year, at least as far as its financial results are concerned. Through Sept. 30, 2023, HCA Healthcare's revenue of $47.7 billion increased by a decent 6.5% year over year. Its earnings per share of $13.07 was roughly 9% higher than the year-ago period.
HCA Healthcare should continue to rebound progressively. The company's business has excellent prospects. Building a network of well-equipped medical facilities is highly capital-intensive, but it's the first step to success in this business. HCA Healthcare already has the advantage of having formed deep relationships with different players in the healthcare industry, something that will be extremely hard for newcomers to replicate.
Unless something drastic happens, the company should remain a leading hospital chain for a long time. Further, even in comparison to its existing competitors, HCA Healthcare has generally been a standout -- for instance, it has continuously increased its market share, going from 23% in 2011 to 27% as of the end of 2020. HCA Healthcare's blueprint for success should continue to work, especially as the world's population ages and there is a higher demand for the services it offers.
That's why the company's shares are worth buying today.
