3 Stocks to Buy and Hold Forever

Conventional wisdom holds that there are two important aspects to investing time: when to buy stocks and when to sell them. But are there any stocks that let you eliminate some selling?

Three Motley Fool contributors believe the answer to that question is a resounding “yes.” Here’s why they think AbbVie (ABBV 0.10%), Eli Lilly (LLY -1.21%)AND Vertex Pharmaceuticals (VRTX 1.40%) as healthcare stocks you can buy and hold forever.

The key to longevity

Keith Speights (AbbVie): What is the secret to longevity in the business world? Having the ability to adapt to a rapidly changing environment. If a company can adapt effectively, it will stay in business forever. I think AbbVie is a master at adapting.

Let’s take into account that in 2013 (the year in which the spin-off took place) Abbott Laboratories), AbbVie’s autoimmune disease drug Humira generated 57% of the company’s total revenue. Its No. 2 product at the time, AndroGel, had less than one-tenth of the sales of Humira.

But Humira no longer has patent exclusivity. Is AbbVie struggling with declining sales of its best-selling product? No. The company has adapted. In the years leading up to Humira’s patent expiration, the company has invested heavily in research and development. And made smart acquisitions.

Those efforts paid off. Humira accounted for just 19.5% of AbbVie’s total revenue in the second quarter of 2024. But the drugmaker still earned more than 42% more revenue in the first half of this year than it did in All from 2013.

I have no doubt that the company will be able to survive and thrive in the future, regardless of the changes. And it will pay shareholders handsomely along the way: AbbVie is the Dividend King with a forward dividend yield of 3.2%.

Eli Lilly is the best stock you can buy and forget about

David Jagielski (Eli Lilly): There aren’t many stocks I’d say you can buy and hold forever, but pharmaceutical giant Eli Lilly is certainly one of them. With a history of growth that stretches back more than a century, the company has consistently found ways to expand and innovate.

The best-selling products this year will likely be Zepbound (for weight loss) and Mounjaro (for diabetes), and that may not change for the foreseeable future. Innovation, however, will be a key part of long-term success, and Eli Lilly is well-positioned to do so.

With a strong foundation and a broad business spanning multiple therapeutic areas, Lilly has many ways to expand its operations in the long term. Cancer, immunology, neurodegeneration and pain are some of the areas it is focusing on in its process.

Then there are the acquisitions Lilly can pursue to bolster and accelerate its growth. It can afford to do so because it generates impressive profit margins of around 20%, which can help the company accumulate the cash it needs to pursue any growth opportunities it sees fit.

The blockbuster drugs it has today can help Lilly generate revenue and profits that will help pave the way for new drugs it brings to market. Patents don’t last forever, so the company’s continued focus on innovation makes it a great stock to buy and hold.

And that culture of growth is evident at the very top. CEO David Ricks, speaking about the company’s early gains in the weight-loss market, doesn’t sound happy about Eli Lilly’s strong performance and assets.

Instead, Ricks said in a recent interview that he wants to “leverage” the company’s lead in obesity treatments by bringing more products to market. It’s the kind of leadership and mindset that could ensure Eli Lilly remains a leading growth stock for decades.

A company with a vision of victory

Prosper Junior Bakiny (Vertex Pharmaceuticals): Most businesses have a purpose or mission, something they are trying to achieve beyond making a profit. Having a purpose or mission does not guarantee success, but it helps give the business a general direction.

Vertex Pharmaceuticals, a leading biotech company, has set out to develop cures for serious diseases, especially those for which there are few treatment options. The drugmaker is not alone in its industry in this area, but it is one of the best at it.

Vertex has developed and now sells the only drugs that treat the causes of a rare disease called cystic fibrosis (CF), and has maintained this monopoly for more than a decade, even as several large and successful drugmakers actively seek to challenge it.

Having a strategy means nothing without the ability to execute. Vertex has both, as proven by its CF breakthroughs. Biotechnology is expanding beyond its core area of ​​expertise.

Its latest product, Casgevy, is a gene-editing therapy for two rare blood disorders. Several more therapies should be available in the coming years, including a treatment for acute pain that is currently being evaluated for regulatory approval.

His pipeline includes several other promising candidates. Past may not guarantee future success, but in Vertex’s case, its past performance stems from hidden strengths that its business still seems to demonstrate.

There will be setbacks and setbacks; that’s inevitable. However, Vertex Pharmaceuticals looks poised to deliver major medical breakthroughs, strong financial results and excellent stock market returns over the long term. This is a fantastic stock to buy and hold forever.