Got $200? 2 Healthcare Stocks to Buy and Hold Forever.

Few industries are more essential than healthcare. That makes it an excellent place to look for stocks that can perform well over extended periods since the basic services they offer are unlikely to become obsolete anytime soon.

However, that doesn’t guarantee success for any individual corporation. Even the healthcare sector changes and evolves in important ways. Only innovative companies can remain relevant over the long run. And some of them can be had for less than $200 per share.

Let’s consider two examples: Novo Nordisk (NVO -0.54%) and Medtronic (MDT -0.69%).

1. Novo Nordisk

There are many pharmaceutical companies out there, but few have been around as long as Novo Nordisk. The drugmaker has been a leader in diabetes care more or less since its inception in the 1920s. It has dominated the insulin market for decades and has made significant breakthroughs. The lesson from Novo Nordisk’s storied history is that it has a culture centered around innovation, particularly in its core therapeutic area.

Being a leader in developing therapies for a particular illness for so long doesn’t happen by accident, especially considering how competitive the pharmaceutical industry is. Novo Nordisk is still at it, of course. It is currently awaiting approval for a once-weekly insulin product called Awiqli. Novo Nordisk is also the mastermind behind what have become very famous drugs: Ozempic and Wegovy. The former is indicated to treat diabetes, while the latter targets obesity.

They have the same active ingredient, semaglutide, which belongs to the GLP-1 receptor agonist class, a group of medicines that helps the body produce the optimal amount of insulin, among other things. Ozempic and Wegovy have seen their sales soar rapidly in recent years — both ran into supply problems because the demand was too high for Novo Nordisk to keep up. Here’s what investors can expect: Novo Nordisk’s revenue and earnings will continue to grow rapidly just as they have in the past few years. 

But Ozempic and Wegovy only address Novo Nordisk’s mid-term prospects. The more important point is the company’s innovative abilities. It is already developing next-gen obesity therapies. It is also expanding beyond its core areas of diabetes care and obesity. It’s hard to know what Novo Nordisk’s pipeline will look like in 10 years, but one thing is for sure: The pharmaceutical giant will keep grinding out brand-new therapies.

It’s difficult to bet against this drugmaker, which looks like a buy-and-forget stock. The company’s shares are changing hands for just under $142 apiece.

2. Medtronic

Medtronic is one of the leading medical device companies in the world. Of course, size isn’t everything in business. Still, Medtronic’s massive portfolio of devices and vast footprints around the globe grant the company significant diversification. That’s a bit of an advantage. The healthcare industry is one of the most regulated. Successfully navigating this market in more than a hundred countries isn’t easy, but Medtronic has done so for a while now.

True, the company’s financial results haven’t been particularly impressive in recent years, even if we put aside the disruptions caused by the pandemic. That said, there is hope for Medtronic. Two of the company’s segments should allow it to improve its performance over the long run. One of them is diabetes care. Medtronic develops and markets several devices to help those with diabetes better handle this chronic health condition. It is one of the leaders in the insulin pump market.

One of the company’s latest innovations in this field is the MiniMed 780G, a pump that automatically delivers insulin as often as every five minutes to keep sugar levels within a predefined range. There are half a billion diabetics worldwide, many of whom are in third-world countries and don’t have access to cutting-edge innovations like Medtronic’s 780G.

So, there is a vast market here for the company. Then there is Medtronic’s robotic-assisted surgery system, the Hugo. Medtronic pointed out last year that only 5% of procedures that could be performed robotically currently are. And that doesn’t even account for the fact that the need for such procedures will increase as the world’s population ages. So, Medtronic should be fine in the long run. The company is also an excellent target for income seekers.

The healthcare giant has raised its payout for 47 consecutive years. It is inching closer to Dividend King status. Meanwhile, the stock’s price is about $82, so $200 gets investors two shares with change to spare. That’s not a bad price to invest in a reliable dividend payer that should deliver steady returns for a long time.