2 Top Healthcare Dividend Stocks to Buy and Hold Forever

Considering that most companies don’t even stay in business for 20 years, finding stocks worth holding onto for good isn’t always easy. Thankfully, some seem to have the qualities that will enable them to perform well for a very long time.

Two such companies in the healthcare sector are Bristol Myers Squibb (BMY 2.56%) and Medtronic (MDT 2.78%). In addition to having robust underlying businesses, both have terrific dividend programs.

Here’s more on these two healthcare leaders.

Image source: Getty Images.

1. Bristol Myers Squibb

Bristol Myers Squibb is a leading drugmaker with a vast portfolio of products across several therapeutic areas, although the company has historically had a strong presence in oncology. Last year, 10 of the drugmaker’s products each generated over $1 billion in sales.

Some of these are medicines that have lost patent protection and are seeing sales decline, but the company has a growth portfolio of newer therapies that should replace older ones. It will face more patent cliffs by the end of the decade, including those for Eliquis, an anticoagulant, and Opdivo, a cancer medicine. These are its two best-selling drugs.

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NYSE: BMY

Bristol Myers Squibb

Today’s Change

(-2.56%) $-1.59

Current Price

$60.73

Key Data Points

Market Cap

$127B

Day’s Range

$60.25 - $62.16

52wk Range

$42.52 - $63.33

Volume

498K

Avg Vol

14M

Gross Margin

65.89%

Dividend Yield

3.99%

However, Bristol Myers Squibb is prepared: A newer, subcutaneous formulation of Opdivo that is easier and faster to administer will help it keep that franchise going for longer. And newer products will have a far greater impact once Eliquis loses patent exclusivity. That’s how the company has historically overcome obstacles, and we can expect it to continue doing so while still delivering consistent revenue and earnings.

Lastly, Bristol Myers Squibb is an attractive dividend stock with a juicy forward yield of 4%. It has increased its dividend payout by 65.8% over the past decade. While the stock may be somewhat “boring,” shareholders can quietly earn solid returns over the long run, especially if they opt to reinvest the dividend.

2. Medtronic

Medtronic is a medical device leader. Its portfolio of products spans several areas, including some where it has made important breakthroughs or is the market leader. Its current lineup features a portfolio in pulsed field ablation (PFA), a relatively new and innovative method that it helped pioneer for treating certain heart problems.

The company routinely launches newer products while delivering reliable – albeit rarely phenomenal – revenue and earnings growth. One of Medtronic’s latest launches should become a significant long-term growth driver. Last year, it earned clearance for the Hugo system, a robotic-assisted surgery device, in urologic procedures. Considering that the RAS market is underpenetrated and that Medtronic will seek new indications for this device, there is a significant opportunity ahead.

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NYSE: MDT

Medtronic

Today’s Change

(-2.78%) $-2.66

Current Price

$92.94

Key Data Points

Market Cap

$123B

Day’s Range

$92.33 - $95.09

52wk Range

$79.55 - $106.33

Volume

268K

Avg Vol

7.7M

Gross Margin

59.59%

Dividend Yield

2.96%

The healthcare giant is also making important changes to its business. Medtronic is in the midst of separating its diabetes care unit into a stand-alone corporation, which will help boost margins, as this segment has lower operating margins than the rest of the business. This (and other) initiatives will pay off in the long run.

Then there’s Medtronic’s fantastic dividend program: The company has increased its payouts annually for 48 consecutive years. This streak provides strong evidence that Medtronic can survive almost any market condition and continue to perform relatively well long after. That makes it an excellent pick for long-term, income-oriented investors.