Many investors are anxious just a few resurgence of turbulence inside the markets and what that will mean for stocks inside the weeks and months ahead. But great businesses can withstand the test of time and provide meaningful portfolio returns. Concerns with regard to the U.S. economy, its impact on the worldwide economy, and the trickle-down impact of inflation on businesses across industries are legitimate.
On the similar time, in case you’re investing your money into excellent firms and intend to hold on to your positions for years at a time, these short-term movements needn’t deter you out of your overarching financial goals. On that note, listed listed below are two monster growth stocks to contemplate adding to your portfolio immediately.
1. AbbVie
AbbVie (NYSE: ABBV) has handled some short-term headwinds in recent quarters attributable to the dearth of patent exclusivity on Humira. The drug was once the world’s top-selling drug and the crown jewel of this healthcare company’s portfolio.
While the entry of generics into the market has definitely driven a decline in Humira sales, AbbVie has other winners in its portfolio that are slowly but surely offsetting the of those changes. Take into accout, pharmaceutical firms are more likely to be far less cyclical than other businesses. Nonetheless, they do endure changing business cycles as recent drugs are developed and approved, and older, top-selling drugs give technique to competition.
The standard period of patient exclusivity for newly approved drugs is around 12 years, but this will likely vary based on the actual product in query. AbbVie delayed patent expiration on Humira for years, eventually extending its patent exclusivity period to around twenty years before it was finally forced to contend with the impact of biosimilars.
Fast-forward to the second quarter of 2024, and the impact of AbbVie’s broad portfolio of other blockbuster drugs is taking hold despite waning sales of Humira, driving revenue and profits upward. Worldwide net revenue inside the three-month period totaled $14.5 billion, up roughly 4% from one yr ago, a healthy increase for a business at its level of maturity.
This performance was driven by robust growth in its oncology and neuroscience drug portfolios of 11% and 15%, respectively. Blockbuster immunology drugs like Skryizi and Rinvoq, which saw revenue rise by respective rates of 45% and 56% inside the quarter from the year-ago period, were also heavy hitters here.
The company may very well be very profitable. In the first half of 2024, AbbVie brought in net earnings of roughly $2.8 billion, a 21% increase from the first half of 2023. And over the trailing 12 months, AbbVie has brought in operating money flow of about $19 billion with free money flow inside the ballpark of $20 billion.
As a long-standing dividend payer, AbbVie has increased its dividend by over 285% since it spun off from Abbott Laboratories over a decade ago. It currently boasts a forward annual dividend yield of around 3.1%, roughly double that of the common stock trading on the S&P 500, with a forward annual dividend rate of $6.20 per share.
For many who’re seeking a top-notch income-producing healthcare stock in order so as to add to your portfolio, AbbVie may very well be price a protracted, hard re-assessment.
2. Cava Group
Cava Group (NYSE: CAVA) owns and operates a sequence of Mediterranean style fast-casual restaurants across the U.S. Shares have been doing exceptionally well recently, with the stock soaring by an eye-popping 200% since January.
The company only went public in June 2023, but its fast-growing business that’s already generating profits appears to be attracting increased interest from investors. Now, it’s critical to look beyond share price increases and on the underlying business to see what’s happening.
Throughout the second quarter of 2024, Cava’s revenue jumped 35% yr over yr to $231 million. The restaurant stock also opened 18 net recent restaurants inside the three-month period, which resulted in Cava ending the quarter with 22% more restaurants in its portfolio than the similar time last yr.
Same restaurant sales popped by greater than 14% from the year-ago quarter, while restaurant level profits soared 37% from the comparable period in 2023. About 36% of Cava’s orders inside the quarter came from digital sales.
From a profitability perspective, Cava reported just shy of $20 million in net income inside the three-month period. That was about 3 times higher than its net income just one yr ago. The company will be cash-flow-positive. Net money from operations totaled around $49 million inside the second quarter of 2024, while free money flow came to around $23 million.
Cava Group, like other members of the restaurant industry, goes to experience a certain level of cyclicality and vulnerability to changing consumer spending patterns. Nonetheless, the company’s fast-casual dining experience can provide a less expensive and accessible (to not say barely healthier) alternative to consumers, which may very well be particularly appealing when wallets are constrained.
Should you’ve a well-diversified portfolio and the danger appetite to invest in restaurant stocks, Cava looks like a solid selection to capitalize on the expansion inside the fast-casual segment.
Must you invest $1,000 in AbbVie immediately?
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Rachel Warren has positions in AbbVie. The Motley Idiot has positions in and recommends Abbott Laboratories. The Motley Idiot recommends Cava Group. The Motley Idiot has a disclosure policy.
2 Monster Stocks You Can Buy Right Now Before They Surge Even Higher was originally published by The Motley Idiot