What makes a winning healthcare stock? One that is a leader in its industry and has proven its market strength and ability to generate growth over time. You'll find these players in various areas, from biotech to pharma and medical devices. These are stocks you'll want to add to your portfolio and hold onto for a number of years to benefit from their fantastic businesses.
Now, my prediction is three in particular are poised to outperform over the next few years: These stocks could be the best-performing healthcare stocks through 2030. Let's get to know each of these exciting companies.
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1. Eli Lilly
Eli Lilly (LLY 2.26%) is a major pharmaceutical player selling a variety of drugs across treatment areas, but in recent times, one particular portfolio has supercharged revenue growth. And this is the weight loss drug portfolio. Lilly sells tirzepatide, commercialized as Mounjaro for type 2 diabetes and as Zepbound for weight loss -- but doctors have prescribed either of these injectables for weight control.
On top of this, Lilly recently submitted its oral weight loss candidate to regulators for review, so if all goes well, it soon may add a third product to this valuable portfolio. And a weight loss pill offers significant advantages -- it's more convenient for the patient and it's cheaper for the company to produce (when compared to today's injectable pen format).
NYSE: LLY
Key Data Points
Lilly's weight loss drugs have been driving revenue quarter after quarter, and in the most recent period, they helped revenue soar more than 50%. And together Mounjaro and Zepbound brought in about $10 billion in sales. Considering the sustained high demand for weight loss drugs, there's reason to be optimistic about the portfolio's growth potential over the coming years. And this could drive ongoing investor interest in Lilly stock.
2. Intuitive Surgical
Intuitive Surgical (ISRG 2.76%) is the world's leader in robotic surgery, and importantly, the company has a strong moat that should help it maintain this position. Two elements make up this moat: Most surgeons train on Intuitive's flagship Da Vinci system, so it's very likely that these doctors will choose to continue using a platform they know well. Hospitals invest $1 million or more in a Da Vinci, so it's most cost-effective to continue with the platform over time instead of switching.
NASDAQ: ISRG
Key Data Points
All of this has led to increases in the installed base of systems, the number of procedures performed, and revenue over time. One thing I particularly like about Intuitive is that the company's revenue opportunity doesn't end when a hospital buys or leases a Da Vinci system. Instead, each system represents a source of recurrent revenue. This is because hospitals must invest in services to maintain the Da Vinci as well as the instruments and accessories used with each procedure. In fact, accessories and instruments represent the lion's share of Intuitive's quarterly revenue.
All of this should support earnings growth and stock performance over the long term.
3. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 2.89%) is the world's leading maker of treatments for cystic fibrosis (CF), and this has led to gains in earnings and the stock price in recent years. The company's intellectual property protects its CF position through the end of the next decade -- and Vertex continues to innovate in the space, making me optimistic about leadership beyond that point.
Vertex's CF drugs are blockbusters, delivering billions of dollars of revenue each year. In the most recent quarter, the company reported revenue of more than $3 billion and said it expects as much as $12 billion in revenue for the full year.
NASDAQ: VRTX
Key Data Points
This biotech giant also has broadened its reach into other areas in recent years, and that's generating additional growth. Casgevy for blood disorders reached its goal of surpassing $100 million in revenue last year. And Vertex expects the number of prescriptions for its new pain medicine, Journavx, to triple this year -- last year, doctors wrote about half a million prescriptions for the drug.
With these growth drivers, and potentially other pipeline candidates progressing, Vertex has plenty of catalysts to push the shares to outstanding performance from now through 2030.
