3 Stocks to Buy and Hold for the Next Decade: Eli Lilly, HCA Healthcare, and Seagen

NYSE: LLY | Eli Lilly and Company  News, Ratings, and Charts

LLY – Healthcare stocks have been enjoying a bull run since March last year owing to the COVID-19 pandemic. Every company in this sector, whether a pharmaceutical, hospital or biotechnology company, has benefited from strong demand. Eli Lilly (LLY), HCA Healthcare (HCA), and Seagen (SGEN) are three such companies. They have delivered market-beating returns over the past year. We think a growing need for healthcare services and these companies’ robust business models make their stocks ideal to buy and hold for at least the next decade.

If there is one lesson the COVID-19 pandemic has taught humanity, it is to value our health over all else. As such, healthcare now tops most people’s priority lists, and companies that offer products and services in this sector are flourishing.

The Centers for Medicare & Medicaid Services’  Office of the Actuary’s preliminary projections state that national healthcare spending in the U.S. will  increase to $6.2 trillion by 2028. Reviving Obamacare and implementing measures to offer subsidized healthcare to all Americans are among the Biden administration’s major  plans.

So. we think Pharmaceutical companies, hospital operators, and biotechnology players are all poised to see spectacular growth.  Because of the sector’s growing importance, investors can now consider healthcare stocks fundamentally sound for the long term.

We view Eli Lilly and Company (LLY), HCA Healthcare, Inc. (HCA), and Seagen, Inc. (SGEN) as three of the best-performing healthcare stocks in terms of their business models and financials.

Eli Lilly and Company (LLY)

LLY is one of the top pharmaceutical companies. It offers  endocrinology products to  treat diabetes and  osteoporosis in men and postmenopausal women. It has also developed a cure for human growth hormone deficiency and pediatric growth conditions. LLY also has a collaboration with Junshi Biosciences to develop therapeutic antibodies for the potential prevention and treatment of COVID-19.

The U.S. FDA has granted Emergency Use Authorization (EUA) to LLY’s antibody therapies for Covid-19, which has been developed in collaboration with AbCellera. The latest authorization comes from Phase III data from the BLAZE-1 trial, which demonstrated that the combination therapy reduced the risk of COVID-19 hospitalizations and death by 70%.

During the fourth quarter ended December 2020, LLY’s revenue grew 21.7% year-over-year to $7.4 billion, driven by a 24% increase in volume  and a 1% increase due to the favorable impact of foreign exchange rates. The company also recognized $871.2 million in revenue from bamlanivimab, its COVID-19 antibody therapy. Its  EPS for the quarter climbed to $2.75 compared to $1.73 posted in the same period last year.

Analysts expect LLY’s revenue for the quarter ending March 31, 2021 to be $7.1 billion, representing a 21.9% increase year-over-year. Its EPS for the quarter is likely to increase 25.7% to $2.20.

LLY ended yesterday’s trading session at $204.40, rising 40.5% over the past year. During the past six months, LLY gained 33.6%.

LLY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

LLY  has an A  grade  for Quality and a B grade for Growth, Value, and Sentiment. It is ranked #7 of 96 stocks in the Medical – Pharmaceuticals industry.

In total, we rate LLY on eight different levels. Beyond what we stated above, we have also given LLY grades for Momentum and Stability. Get all the LLY ratings here.

HCA Healthcare, Inc. (HCA)

HCA, a leading healthcare provider in the U.S.  It operates hospitals that offer  medical and surgical services. Its services include inpatient care, intensive care, diagnostic, cardiac care and  emergency services. It also offers outpatient services, such as surgery, laboratory, radiology, respiratory therapy, cardiology and physical therapy.

HCA has entered a new joint venture business with A Plus International Inc. to expand access to personal protective equipment (PPE) by manufacturing surgical and procedure masks in the U.S. The partnership includes the production of Level 1 and Level 3 masks in accordance with the American Society for Testing and Materials (ASTM).HCA’s revenue for the fourth quarter ended December 31, 2020 has climbed 5.7% over the year to $14.3 billion. And its EPS for the quarter rose to $4.13 from $3.09 posted in the same period last year. Its same facility admissions and same facility equivalent admissions fell  3.4% and 7.5%, respectively. At the same time, same facility revenue per equivalent admission rose 14.1% during the quarter.

A consensus revenue estimate for the quarter ending March 31, 2021 is $13.6 billion, representing  a 5.6% increase year-over-year. Meanwhile, its EPS is likely to grow 40.3% to $3.27.

Over the past year, HCA has gained 19.2%, to close  yesterday’s trading session at $174.59. The stock is trading 2.6% below its 52-week high of $179.30. Over the past six months, the stock climbed 32%.

HCA’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. HCA has an A grade  for both Growth and Sentiment. It is ranked #1 of 10 in the Medical – Hospitals industry.

Click here to see the additional POWR Ratings for HCA (Stability, Value, Quality, and Momentum).

Seagen, Inc. (SGEN)

SGEN is a biotechnology company that deals primarily with developing and marketing an innovative treatment of cancer that leverages monoclonal antibody-based therapies. The  drugs formulated by the company include Adcetris, Padcev, and Tukysa.

SGEN has submitted  a Biologics License Application (BLA) to the U.S. FDA seeking accelerated approval for tisotumab vedotin. This drug is used for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy.

Analysts expect revenue for the quarter ended December 31, 2020 to be $586.6 million, representing  102.4% year-over-year growth. Its EPS is likely to grow at the rate of 236.6% per annum over the next five years.

SGEN has climbed 45.4% during the past year to close yesterday’s session at $169.35. Over the past six months, the stock gained 7.4%.

SGEN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. SGEN has an A  grade for Growth and B grade for Momentum, Sentiment, and Value. Of the 478 stocks in the Biotech industry, it is ranked #5.

In addition to the POWR Ratings grades I’ve just highlighted, you can see SGEN’s ratings for Stability and Quality here.

The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

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LLY shares were trading at $201.82 per share on Thursday afternoon, down $2.57 (-1.26%). Year-to-date, LLY has gained 19.53%, versus a 4.06% rise in the benchmark S&P 500 index during the same period.


About the Author: Namrata Sen Chanda


Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...


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