If You're In Your 20's, Consider Buying These 3 Healthcare Stocks

Core Viewpoint - Investing in industry leaders within growth-oriented sectors, such as healthcare, is advisable for younger investors who have a long investment horizon. This approach mitigates risks associated with aggressive stock picking and capitalizes on the stability and growth potential of established companies [1][2][15]. Group 1: Medtronic - Medtronic is a leading medical device manufacturer with significant market positions in various niches, but its growth has recently stalled, leading to a 30% decline from its 2021 highs. The current dividend yield is approximately 3%, near historical highs [4][5]. - The company has a strong track record of resilience, evidenced by 48 consecutive years of annual dividend increases, and is taking steps to enhance profitability through cost-cutting and a focus on core operations. A spin-off of its diabetes business is planned for early 2026 [5][6]. Group 2: Johnson & Johnson - Johnson & Johnson is a major player in pharmaceuticals and medical devices, currently facing challenges due to ongoing talcum powder lawsuits, which have created uncertainty around its stock. The dividend yield stands at 3%, higher than the average for pharmaceutical stocks [7][8]. - Despite a slight decline of about 5% from its all-time high, the company has a strong history of dividend increases over six decades, indicating its ability to navigate tough times. However, it faces headwinds such as patent expirations and the need for new product development [9]. Group 3: Merck - Merck specializes in pharmaceuticals and is currently experiencing a downturn, with its stock down nearly 40% from its 2024 highs. The dividend yield is around 4%, which is historically high [11][13]. - The company is facing a significant challenge with the impending patent expiration of its key oncology drug, Keytruda, which raises concerns about its revenue pipeline. However, Merck has a strong R&D capability and the potential to acquire smaller companies to bolster its product offerings [12][13]. Group 4: Healthcare Sector Strategy - Investors can choose between high-risk investments in small startups or safer bets on established industry leaders. Focusing on proven companies like Medtronic, Johnson & Johnson, and Merck during periods of investor pessimism can yield favorable long-term returns, especially for younger investors who can reinvest dividends [14][15].