If you're searching for stocks that could help you protect and grow your wealth, you've come to the right place. Here are two excellent businesses that are well-positioned to make their shareowners richer in 2024 and beyond.
1. Costco Wholesale
Inflation may be moderating, but shoppers are still hunting for bargains. That plays right into Costco Wholesale's (COST 1.01%) hands. The retail giant is adored by its customers for its quality merchandise and ultra-low prices.
By constantly varying its wares, Costco creates a shopping experience that's akin to a treasure hunt. This helps to drive strong recurring traffic to its well-stocked warehouse stores. We saw more evidence of this in December; Costco's revenue climbed 9.9% year over year to $26.15 billion, driven by an 8.5% rise in comparable-store sales.
Costco's popular membership program also keeps customers coming back to its stores. Buying a membership gives people an economic incentive to maximize the return on their investment by shopping at Costco and saving as much as possible. Moreover, these membership fees account for the lion's share of the company's profits. The discount titan is thus free to price its goods just slightly higher than its costs, thereby strengthening its value proposition to consumers.
This strategy has also created tremendous value for Costco's shareholders. The retailer's stock price is up 486% over the past decade, fueled by a 527% surge in its free cash flow.
COST Free Cash Flow data by YCharts
And more gains likely lie ahead. As of Jan. 18, Costco operated 872 stores. Six hundred of those stores are in the U.S. and Puerto Rico, while several promising markets like China have fewer than 10. International expansion should help to drive Costco's sales and profits steadily higher in the coming years.
2. Eli Lilly
For the approximately 70% of American adults who are obese or overweight, losing as little as 5% of body weight could help to lower the risk of cardiovascular disease. The U.S. Food and Drug Administration (FDA) noted this fact when it approved Eli Lilly's (LLY 1.19%) Zepbound weight management treatment for obese adults, as well as those who are overweight with at least one weight-related condition, such as type 2 diabetes. Participants in a clinical trial who received the highest dosage of Zepbound lost a whopping 18% of their body weight on average.
Zepbound supports rapid weight loss by activating hormone receptors that decrease appetite. Zepbound's active ingredient, tirzepatide, is also approved under the trade name Mounjaro to improve blood sugar in adults with type 2 diabetes in combination with dietary changes and exercise.
Diabetes and weight loss treatments are potentially massive markets for Eli Lilly. Sales of anti-obesity medications alone could reach $100 billion by the end of the decade, according to Goldman Sachs.
Better still, the healthcare leader might have another multibillion-dollar drug in donanemab. A clinical study showed that the investigational therapy significantly slowed the cognitive and functional decline typically experienced by people in the early stages of Alzheimer's disease. Trial participants were better able to perform daily living activities at 18 months and 39% less likely to have advanced to the next stage of the disease compared to placebo.
Together, these potentially game-changing treatments for obesity, diabetes, and Alzheimer's disease could help to improve countless lives. Sales of these drugs should also help Eli Lilly continue to deliver wealth-building returns to its shareowners in the years ahead.
