2 shares of No-Brainer Healthcare to buy for $1,000

Some stocks look so attractive that they are hard to pass up. They are often industry leaders with solid businesses, competitive advantages and lots of growth potential. That describes it Novo Nordisk (NGO 0.07%) and HCA Healthcare (HCA 1.48%) good These two healthcare leaders delivered above-average returns overall, but have plenty left in the tank.

For those with $1,000 to spare that isn’t earmarked for emergencies, here’s why putting that money into these two companies would be a great move.

1. Novo Nordisk

Novo Nordisk, a long-time leader in the pharmaceutical industry, has become even more of a household name in recent years. This is due to the Danish drug manufacturer’s work in obesity care. Novo Nordisk’s Wegovy, a weight loss therapy, is one of the leaders in this fast-growing market. Ozempic, another famous brand that shares Wegovy’s active ingredient (semaglutide), is a top-selling diabetes drug. These two help Novo Nordisk deliver excellent financial results.

In the first half of the year, the company’s net sales rose 24 percent year-on-year to 133.4 billion Danish kroner ($19.6 billion), an excellent performance for a pharmaceutical giant. Despite its strong results and clinical progress, Novo Nordisk has encountered some problems. For example, the company failed to win approval for a once-weekly insulin drug in the US, partly because of manufacturing problems, even though it was already approved in the European Union, China and Japan (where it’s called Awiqli).

Still, the occasional regulatory hurdle isn’t such a big deal for a company that’s so successful. Novo Nordisk is winning approvals elsewhere. Wegovy won the label extension in March to reduce the risk of various cardiovascular events in patients with diabetes or who are overweight. In all likelihood, it will win many more green lights.

Moreover, Novo Nordisk should have many more growth factors beyond Ozempic and Wegovy. The company should remain a leader in developing anti-obesity treatments — even with many of its peers wanting to eat their lunch. Novo Nordisk has more experience than any of its competitors in drug development in this area, which gives the company a competitive advantage. His pipeline is full of such drugs.

According to some estimates, Novo Nordisk’s Cagrisema, one of the most promising investigational therapies in this field, could generate as much as $20.2 billion in revenue by 2030. Novo Nordisk has many more candidates beyond its core areas of diabetes and obesity. The real reason to buy the company lies in its innovative quality and proven ability to perform well over long periods.

With shares changing hands for just under $135, investors can buy seven for $1,000.

2. HCA Healthcare

Over the past five years, HCA Healthcare has demonstrated its resilience. Perhaps it is to be expected from a hospital chain, one of the leaders in the US. After all, HCA Healthcare offers services—facilities that help care for the sick—that will always be in demand. However, there is more to the story. HCA Healthcare has had to weather pandemic-related disruptions to its business, including fluctuations in admissions and occupancy rates, which are important to its ability to generate revenue. HCA Healthcare then dealt with economic issues, increased labor costs and more.

It has done all this while increasing its market share from 26.5% at the end of 2019 to 28% a year and a half later. HCA Healthcare has continued to grow its position since then, according to management. In other words, it handled those turbulent years better than most of its peers offering the same services it does. And financial results continue to be quite strong. In the second quarter, HCA Healthcare’s revenue of $17.5 billion rose a decent 10% year over year to $17.5 billion, and the company’s earnings per share rose 29% to 5.53 dollars.

HCA Healthcare will run into trouble again, as all corporations do from time to time, but its long-term prospects look bright. Entering its field is incredibly capital intensive – building dozens of facilities is expensive. Earning the business and trust of physicians, patients and third-party payers is no easy feat. That’s why HCA Healthcare has a significant advantage over newcomers.

And even compared to other established peers, its market share gains dating back to at least 2011 (when it had a 23 percent share) show it has what it takes to remain competitive in an industry with potential in the long term. due to demographic changes such as the aging of the world population.

As of this writing, HCA Healthcare shares are worth $367 each, so $1,000 is good for two of them.