Got $2,500? 2 Great Growth Stocks to Buy in 2024

Stocks are off to a very optimistic start to 2024, and investors appear to be increasingly optimistic about the overall state of the markets and the global economy. That’s not to say there aren’t still notable macroeconomic challenges that create a nuanced operating environment for companies across a variety of industries and sectors.

However, good companies with long-term growth stories can stand apart from the competition. If you have cash to invest in stocks (say, $2,500), here are two companies you might consider investing at least a portion of that money the next time you add them to your shopping basket.

1. AbbVie

AbbVie (ABBV -0.95%) Given enough time, successful pharmaceutical companies have come to terms with the reality of losing patent exclusivity on core, profitable products. In AbbVie’s case, the loss of patent exclusivity was for Humira. Humira was not only the best-selling drug, it was the best-selling drug in the world.

While the launch of new generic versions is already having a notable impact on AbbVie’s immunology portfolio and broader balance sheet, this is an expected and predictable aspect of the pharmaceutical business cycle. It will likely take some time for the ship to right itself, as Humira no longer packs a punch against AbbVie’s balance sheet. The good news is that the company has plenty of other blockbuster movies in its portfolio, all scheduled for release soon.

Two powerful drugs that immediately come to mind are the highly successful immunology drugs Skyrizi and Rinvoq. These drugs generated approximately $12 billion in sales in 2023 alone, out of the company’s total sales of $54 billion. Management estimates that these drugs will generate combined annual sales of approximately $27 billion by 2027, well above Humira’s highest ever annual sales of $21 billion. The company also expects Skyrizi and Rinvoq to bring combined annual revenue of $16 billion in 2024.

AbbVie has other blockbuster products such as Botox Cosmetic, Botox Therapeutic, and Vraylar, which is used to treat a variety of mood disorders. These three products generated sales of $2.7 billion, $3 billion, and $2.8 billion, respectively, in 2023.

The company has also strengthened both its neuroscience and oncology pipelines through recent acquisitions. For example, the Immunogen acquisition added ovarian cancer drug Elahere, which some analysts believe could generate about $1.4 billion in annual sales before the end of the decade.

Cyclicality affects all businesses, including pharmaceutical companies, but they are generally more resistant to the ebbs and flows of economic turbulence than companies in other industries. AbbVie has a major product portfolio and remains highly profitable.

Meanwhile, for investors looking for a solid dividend stock, AbbVie has a 3.5% yield at the time of this writing and has increased its dividend by about 45% over the past five years. This looks like a solid business that could add cash in 2024 and hold on for the long term.

2. Merck

Merck (MRK -0.40%) It is a giant biopharmaceutical company that has hands in a variety of fields ranging from prescription drugs to vaccines and animal health products. If you’re taking a closer look at this stock now, you should know that not only is this company one of the largest pharmaceutical companies by revenue, but it also boasts a drug in its portfolio that is expected to become the world’s best-selling drug by 2024.

That blockbuster drug is the cancer drug Keytruda, which is expected to generate $27 billion in sales by 2024 alone. Patent protection for this drug lasts until 2028. Merck is currently working to build sales potential across its other core products in anticipation of the event.

The company is also developing a subcutaneous version of Keytruda, which could help alleviate concerns about the looming patent cliff and extend the drug’s sales life for years to come. Other drugs Merck is developing in oncology and other key disease areas are on track to add $35 billion in sales to its balance sheet by the mid-2030s.

Merck has a habit of growing not only through acquisitions but also through research and development. For example, Merck acquired Prometheus Biosciences for $11 billion last year, a move that added new candidates for treating ulcerative colitis, Crohn’s disease and other autoimmune diseases to its pipeline.

In February, the company announced that it would strengthen its animal health division by acquiring: Elanco‘s aqua business. This move will add supplements, vaccines, manufacturing facilities, water treatment products and pharmaceuticals to its portfolio to serve customers in aquaculture and other related sectors. For example, Merck’s animal health division will now own the rights to a DNA-based vaccine that prevents Atlantic salmon from developing pancreatic disease, a disease commonly reported in the farmed salmon industry.

Merck’s sales and net profit have recently declined, much of which can be attributed to a year-over-year decline in sales of its antiviral COVID-19 drug Lagevrio. In 2023, annual sales of all Merck products totaled $60 billion, a 1% increase from the previous year, but excluding LaGevrio, an increase of 9% from 2022.

Merck also pays a dividend that yields about 2.5% at the time of this writing. If you look back over the past five years, dividends have risen by about 40%. This looks like another solid healthcare business that investors can buy, add to, and hold for the long term.