Fresh all-time highs for the S&P 500 index have been a serious high note for investors as 2024 kicks off. Whether you’re new to the stock market or have been investing for years, you have discovered (or will soon) that it requires you to deal with regularly seeing highs and lows. How you react to what you see will affect your investing journey. What you always need to keep in mind is that the stock market has a remarkable habit of throwing off bearish periods and rising even higher over time.
Now that a new bull market is in full swing, you might be looking for ways to invest. If you’re looking for businesses that you can buy and hold for five years at least, and you have cash on hand not needed for bills or other near-term financial obligations, here are two unstoppable stocks to consider for your portfolio right now.
1. Johnson & Johnson
Johnson & Johnson (JNJ 0.15%) is a well-known name in the pharmaceutical space with a proven ability to turn a profit. J&J’s overall net sales of $85 billion in 2023 were up 7% from 2022. This is a fairly normal growth rate for the business year in and year out.
To help spark further growth in the years ahead, J&J has been making some structural changes in recent years. One notable shift was the spinoff of its consumer health business, which manages its over-the-counter products like Tylenol, Listerine, and Band-Aid, into a separate publicly traded entity called Kenvue. The spinoff accomplished multiple goals for Johnson & Johnson, but the main stated reason for it was to remove a slower-growing business segment. The company also generated $13.2 billion in cash proceeds from Kenvue’s public debut and an accompanying debt offering.
Johnson & Johnson will use that cash infusion, in part, to bolster its remaining pharmaceutical and medical device business segments. In 2023, the pharmaceutical business brought in net sales of about $55 billion, a 5% operational increase from the prior year. The medical device business generated net sales of $30 billion, up 12% operationally from 2022, with its Abiomed subsidiary serving as a key driver of this segment’s growth. Abiomed is a heart pump specialist acquired by Johnson & Johnson in 2022.
The company also boasts an impressive pipeline of potential blockbusters. On March 22, the company garnered regulatory approval for Opsynvi, a once-daily single-combination tablet to treat pulmonary arterial hypertension (PAH). Rival Merck received the regulatory green light for its own PAH drug on March 26. Merck’s drug, called Winrevair, is administered as a subcutaneous injection once every three weeks. Johnson & Johnson controls roughly 50% of the $7 billion PAH drug market. Having a daily pill treatment could help it improve that market share.
Johnson & Johnson’s growth story revolves around a wide-ranging group of blockbuster medicines and products across specialties including immunology, cardiology, and oncology.
It also happens to be a faithful dividend payer. With over six decades and counting of consecutive annual dividend increases to its name, this healthcare giant provides a steady source of passive income for long-term investors. The stock’s performance has admittedly been less than impressive in the last couple of years over investor concerns regarding some significant liability lawsuits. J&J is working to resolve the disputes and no one doubts its business will continue once settlements are reached. In the meantime, the stock drop has contributed to a higher yield. The yield sits around 3%, roughly twice as much as the average stock trading on the S&P 500.
This stock looks like a solid choice for investors searching for a reliable healthcare stock and some dividend income to boot.
2. Amazon
Amazon (AMZN 0.31%) has proven its resilience through many market environments since its IPO in 1997. The volatile economy of the last few years presented several challenges for companies across industries, and Amazon was no exception. Still, it has demonstrated its ability to adjust and grow despite some tough headwinds. It focused heavily on improving operational efficiency while remaining competitive in a rapidly evolving operating landscape.
What has helped it manage during this time is the continued growth of its core businesses like e-commerce and cloud computing, which have benefitted from continuing investments in artificial intelligence. For example, Amazon pumped $2.7 billion into AI start-up Anthropic last year (boosting its total investment to $4 billion) to gain insider access to the advances being made in generative AI. As part of the deal, the AI start-up will be training its models on Amazon’s Inferentia and Trainium chips. Amazon’s cloud division, Amazon Web Services (AWS), will also become the primary cloud provider for Anthropic’s mission-critical workloads.
Amazon is leveraging its cloud division to incorporate AI into a range of products and services. For example, AWS HealthScribe allows medical providers to create notes from appointments with patients using generative AI. Another example is Amazon Bedrock, which enables clients to build generative AI applications using technology from companies like Anthropic and many other AI firms, all through the flagship AWS platform.
In 2023, Amazon reported profits of $30 billion on net sales of $575 billion. The year prior, Amazon reported a net loss of $2.7 billion. Amazon also reported operating income of $37 billion for 2023, a 200% increase from 2022.
While e-commerce is the largest driver of revenue for Amazon, AWS is the leading driver of profitability. Out of Amazon’s total operating income, $25 billion — or about 70% — was derived from AWS in 2023.
Amazon stock is trading up by about 84% from one year ago on investor enthusiasm for its growth potential. Given the investments the company is making and the expanding markets it serves with its various business segments, it shouldn’t have trouble continuing to grow and rewarding investors. This is a business you can buy and hold on to for the long haul.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rachel Warren has positions in Amazon and Johnson & Johnson. The Motley Fool has positions in and recommends Amazon, Kenvue, and Merck. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2026 $13 calls on Kenvue. The Motley Fool has a disclosure policy.
