Many investors are anxious a few resurgence of turbulence within the markets and what that would mean for stocks within the weeks and months ahead. But great businesses can withstand the test of time and supply meaningful portfolio returns. Concerns in regards to the U.S. economy, its impact on the worldwide economy, and the trickle-down impact of inflation on businesses across industries are legitimate.
At the identical time, in case you’re investing your money into excellent firms and intend to carry 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 here 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 lack 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 which are slowly but surely offsetting the final result of those changes. Keep in mind, pharmaceutical firms are 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 typical period of patient exclusivity for newly approved drugs is around 12 years, but this may vary based on the particular 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 within 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% within the quarter from the year-ago period, were also heavy hitters here.
The corporate could be very profitable. In the primary half of 2024, AbbVie brought in net earnings of roughly $2.8 billion, a 21% increase from the primary half of 2023. And over the trailing 12 months, AbbVie has brought in operating money flow of about $19 billion with free money flow within the ballpark of $20 billion.
As a long-standing dividend payer, AbbVie has increased its dividend by over 285% because 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 those who’re in search of a top-notch income-producing healthcare stock so as to add to your portfolio, AbbVie could 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 corporate 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 is vital to look beyond share price increases and on the underlying business to see what’s happening.
Within 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 within the three-month period, which resulted in Cava ending the quarter with 22% more restaurants in its portfolio than the identical 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 within the quarter got here from digital sales.
From a profitability perspective, Cava reported just shy of $20 million in net income within the three-month period. That was about 3 times higher than its net income only one yr ago. The corporate can be cash-flow-positive. Net money from operations totaled around $49 million within the second quarter of 2024, while free money flow got here 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 corporate’s fast-casual dining experience can provide a cheaper and accessible (not to say barely healthier) choice to consumers, which could be particularly appealing when wallets are constrained.
If you’ve a well-diversified portfolio and the danger appetite to speculate in restaurant stocks, Cava looks like a solid selection to capitalize on the expansion within 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