Key Points

• Eli Lilly is investing money to help a smaller biotech develop a new class of small-molecule drugs.

• This move is another in a long list of deals it has made recently to strengthen its operations.

• Lilly's commitment to improving its already strong business makes the stock attractive.

• 10 stocks we like better than Eli Lilly ›

Success often breeds success. Highly profitable companies have more capital to reinvest in the business and pursue high-growth opportunities.

Take Eli Lilly (NYSE: LLY), a pharmaceutical giant that has been performing well in recent years. The drugmaker is not resting on its laurels. Lilly has been signing deals and looking for the next big thing. It recently penned an agreement worth nearly $1 billion in another promising potential avenue. Let's find out what that is and whether it makes the company's shares more attractive.

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Looking for a new class of drugs

On July 24, Gate Biosciences, a privately held biotech, announced it had signed an agreement with Eli Lilly to co-develop a potential new class of drugs called "Molecular Gates." Gate Biosciences received an up-front payment of an undisclosed amount and will be eligible for milestone payments and potential future royalties, in a deal valued at about $856 million, which also includes an equity investment for Gate.

Image source: Getty Images.

Eli Lilly appears to be interested in Gate's approach, which could revolutionize the way we treat many diseases by targeting "difficult to drug" proteins.

Here's the basic idea: Many therapies work by modifying, inhibiting, or otherwise disrupting the proteins that play a role in the diseases they treat. However, some proteins involved in certain conditions have characteristics that make them hard to target with the traditional approaches -- these are what Gate Biosciences calls difficult-to-drug proteins.

The biotech is developing a novel mechanism that could help target even these proteins and unlock potential therapies for many conditions that are currently untreated or undertreated.

Focusing on the bigger picture

Any company that can create a new class of drugs and target otherwise difficult-to-treat diseases could make a fortune. However, Gate Biosciences, founded in 2021, is still in the early stages of this project. It will take many years before we see the results of its efforts, and they might not be positive.

So this approach is still somewhat speculative for now. Eli Lilly knows that, although the pharmaceutical company probably sees some promise in Gate's work. Even so, this investment won't move the needle anytime soon for Lilly, but there is an even more important point to focus on.

The company has achieved considerable success in recent years, generating rapidly growing revenue and earnings. Its core therapeutic areas continue to perform well, with sales of products such as Mounjaro for diabetes and Zepbound for obesity moving in the right direction.

But management is not satisfied. That's why it has made a series of moves recently, including acquisitions and licensing agreements. In July, it closed its buyout of Verve Therapeutics, a smaller biotech working on medicines for cardiovascular diseases.

In May, it announced it would acquire SiteOne Therapeutics, a drugmaker with a promising investigational medicine for pain. In January, it grew its oncology pipeline through the acquisition of a candidate called STX-478 from the privately held biotech Scorpion Therapeutics.

These moves and others show that Eli Lilly is thinking years ahead, a sign of good management. By themselves, none of these licensing deals or acquisitions make the stock a buy. There are better reasons to consider it.

The company remains a top player in diabetes and is emerging as the leader in the burgeoning market for weight management, all while growing its revenue significantly faster than its similarly sized peers. It also has a deep lineup that includes such promising programs as orforglipron, a potential oral weight-loss medicine, and retatrutide, which mimics the action of three gut hormones and could prove more effective than current leading anti-obesity drugs.

Newer medicines and pipeline candidates in other areas -- including immunology, oncology, and Alzheimer's disease -- strengthen the company's business. And it pays a regular dividend that has more than doubled over the past five years.

All this makes the stock attractive. However, Eli Lilly's commitment to continually seeking out the next big thing and planning for patent cliffs well in advance are even better reasons to buy.

Should you invest $1,000 in Eli Lilly right now?

Before you buy stock in Eli Lilly, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,108,033!*

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*Stock Advisor returns as of August 4, 2025

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Medtronic is separating out its lower-margin diabetes care segment.

• It's also pouncing on a massive opportunity in robotic-assisted surgery.

• The healthcare leader has a terrific dividend-growth track record.

• 10 stocks we like better than Medtronic ›

Medical device specialist Medtronic (NYSE: MDT) has not been the best of investments over the past five years. The stock has significantly lagged the market over this period, thanks to weak business fundamentals, including slow revenue growth. The healthcare giant now faces additional obstacles, such as the threat of steeper tariffs due to President Donald Trump's aggressive trade policies.

Even amid all that, Medtronic has plenty of redeeming qualities and could still be a solid investment for long-term investors. Here are three reasons why.

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1. Medtronic is spinning off its diabetes care unit

Medtronic recently announced that it will be spinning off its diabetes care unit, which will become a stand-alone, publicly traded company. Although sales of diabetes products have been growing faster than the rest of Medtronic's business, they have also been a drag on margins. During the company's fiscal year 2025, which ended on April 25, diabetes care accounted for 8% of revenue but only 4% of operating profits. Medtronic's other segments are not growing their sales as quickly, but they have more profitable margins.

In an environment where the company may face higher manufacturing costs due to tariffs, management has chosen to focus on higher-margin opportunities. Diabetes care was also the healthcare specialist's only consumer-facing business; the others offer products to healthcare providers. The move could help Medtronic navigate the macroeconomic landscape better if Trump's tariffs remain in place. That's especially the case if the company can find other lucrative revenue growth opportunities.

Image source: Getty Images.

2. A significant opportunity in robotic-assisted surgery

Medtronic has been developing its robotic-assisted surgery (RAS) system, Hugo, for years. It has been in use in other countries, though it's yet to get the regulatory nod in the United States. The medical device specialist decided to pursue this opportunity because the RAS market is severely underpenetrated. Intuitive Surgical's da Vinci system dominates the field and faces little competition for the range of procedures for which it's approved.

Yet a couple of years ago, Medtronic pointed out that of all the procedures that could be performed robotically, fewer than 5% were. And over the long run, the demand for these kinds of surgeries will increase along with the world's aging population, since seniors are far more likely to face health issues that call for these kinds of interventions. The good news is that Medtronic's Hugo system recently completed clinical trials in the U.S. for urologic procedures. The company has requested clearance from the U.S. Food and Drug Administration for that indication.

It should be the first of many. The Hugo system could eventually become a crucial part of Medtronic's growth strategy and help improve its financial results over the long term, given the significant white space available in the industry.

3. A soon-to-be Dividend King

Despite Medtronic's recent challenges, the company has continued to pay and raise its dividends. In fact, the company has raised dividends for 48 consecutive years. Most businesses don't survive nearly five decades, let alone pay dividends for that long. Medtronic's ability to do so speaks volumes about its underlying business. It's a well-established leader in its niche of the healthcare market, with significant footprint in the industry and a long and successful history of navigating this deeply regulated sector.

All of those factors make Medtronic an excellent pick for income-seeking investors. It should continue rewarding shareholders with payout increases for a long time -- and in two years, it should become a Dividend King.

Medtronic may not be one of the most exciting artificial intelligence (AI) leaders capturing Wall Street's attention, although the company is implementing AI across its business in ways that could pay off in the long run. Regardless, its recent moves in shedding its diabetes care segment and seeking clearance for its Hugo system, along with its consistent dividend streak, make Medtronic a reliable company to invest in for the long haul.

Should you invest $1,000 in Medtronic right now?

Before you buy stock in Medtronic, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medtronic wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,820!*

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*Stock Advisor returns as of July 29, 2025

Prosper Junior Bakiny has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.

Key Points

• President Trump's tariffs could erode healthcare companies' profits, but some may perform well regardless.

• Eli Lilly and Novartis have taken steps to mitigate the potential impact.

• Both drugmakers are innovative, deliver strong financial results, and have excellent dividends.

• 10 stocks we like better than Eli Lilly ›

President Donald Trump's trade policies have caused tumult on Wall Street. The president has pushed for aggressive tariffs on imported goods in an attempt to bring manufacturing jobs back to the country.

Although there were hopes that certain sectors would be spared -- including healthcare -- it turns out that won't be the case. Higher duties on imports could increase companies' costs, which would squeeze their margins and bottom lines, and meaningfully hurt their stock performance. However, even with this threat, there are still some healthcare companies worth investing in, including Eli Lilly (NYSE: LLY) and Novartis (NYSE: NVS).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

1. Eli Lilly

Eli Lilly has been expanding its U.S.-based manufacturing capacity for years, but it has recently accelerated this effort. The pharmaceutical leader has now invested, or committed to invest, $50 billion to build or update manufacturing sites in the country since 2020, about half of which it announced during the first quarter.

According to management, once it completes its ongoing projects, it will be able to manufacture 100% of medicines aimed at U.S. patients within the country while also increasing its exports. In other words, the drugmaker will be mostly insulated from the impact of Trump's tariffs.

And there are other reasons to invest in Eli Lilly. Here are three:

First, the company has demonstrated remarkable innovation in its core areas of diabetes and obesity in recent years. Its newer launches, Mounjaro and Zepbound, are already generating billions and allowing it to grow its revenue and earnings at a good rate.

In the first quarter, its top line rose 45% year over year to $12.7 billion. Net income was $2.8 billion, 23% higher than the year-ago period. Results like these should be the norm in the next five years at least.

Second, the company has an extensive pipeline. Lilly recently reported positive phase 3 results for an oral GLP-1 candidate, orforglipron. This was an important win for the company since its current GLP-1 medicines are administered subcutaneously, so orforglipron could attract some patients who want a more convenient option. And there are many other exciting candidates, even beyond diabetes and obesity care.

Third, the company is an excellent dividend stock, despite its unimpressive forward yield of 0.8%. It has increased its payout by 102.7% in the past five years. But whether you seek growth or income, Eli Lilly is a top stock to buy now and hold for a long time, despite the threat of tariffs.

2. Novartis

Novartis is following a similar blueprint to mitigate the impact of tariffs. The company announced it would invest $23 billion in the next five years to improve its U.S.-based manufacturing footprint.

Although its results may suffer somewhat from the impact of tariffs in the meantime, the company should eventually be able to handle them, assuming the tariffs continue. It's another excellent healthcare stock to consider in this environment, particularly given its strong financial results and promising prospects.

In the first quarter, net sales increased by 12% to $13.2 billion year over year. Net income was $4.5 billion, 22% higher than the year-ago period.

Some might point out that Novartis is losing U.S. patent exclusivity for its heart failure medicine Entresto this year. In the first quarter, it was still its top-selling drug, generating $2.3 billion in sales, 20% higher than the prior-year quarter.

This will be a significant loss, but management has prepared for it. Newer medicines should eventually replace Entresto, including Fabhalta, which treats paroxysmal nocturnal hemoglobinuria (a rare blood disease), and cancer drugs Scemblix and Pluvicto.

All of them first earned approval in the U.S. between 2021 and 2023. In the first quarter, Pluvicto, the best-selling of the trio, generated revenue of $371 million, a 20% year-over-year increase. Furthermore, Novartis' deep pipeline will lead to even more launches. The company currently has over 100 ongoing programs.

Lastly, Novartis is also a strong income stock. The drugmaker has increased its dividend for 28 consecutive years and currently offers a forward yield of 3.3%, significantly higher than the S&P 500's average yield of 1.3%.

It should deliver solid returns for patient investors, despite an upcoming major patent cliff and potential impacts from tariffs.

Should you invest $1,000 in Eli Lilly right now?

Before you buy stock in Eli Lilly, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

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*Stock Advisor returns as of July 15, 2025

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Merck is seeking ways to prepare for a significant upcoming patent cliff.

• The company has just announced another acquisition that will help it achieve that goal.

• With its newer products, strong dividend, and reasonable valuation, Merck still looks attractive.

• 10 stocks we like better than Merck ›

Merck (NYSE: MRK), a leading pharmaceutical company, generates consistent revenue and profits. However, the stock has been under pressure over the past year due to its reliance on Keytruda, its famous cancer medicine. It might be the best-selling drug in the world, but Keytruda will experience a patent cliff by the end of the decade -- a significant risk investors have to take into consideration.

Merck has been looking for ways to mitigate the risk of competition, and the drugmaker just made a move that could help along those lines. Should investors consider buying the stock?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Merck dishes $10 billion to expand its lineup

On July 9, Merck announced that it would acquire Verona Pharma, a U.K.-based biotechnology company specializing in the development of medicines for respiratory diseases. Merck will pay $10 billion in cash for this transaction, allowing it to add Ohtuvayre -- which treats chronic obstructive pulmonary disease (COPD) -- to its portfolio.

First approved by the U.S. Food and Drug Administration (FDA) last year, Ohtuvayre is a treatment for COPD that looks highly promising. It has so far had a successful launch, and it is still being investigated across other conditions, which could later lead to label expansions.

Though estimates vary (as always), some analysts think Ohtuvayre sales could peak at around $4 billion. So, it seems the company has yet another blockbuster on its hands. But will that be enough to replace Keytruda?

Merck's multipronged approach

Merck has entered into several such agreements in recent years. In 2021, it acquired Acceleron Pharma for $11.5 billion. This deal eventually allowed it to launch Winrevair, a medicine for pulmonary arterial tension. Winrevair is yet another promising therapy, with projected peak sales at around $3 billion.

Between Ohtuvayre and Winrevair, that's at most $7 billion in peak annual revenue, though, much lower than the $29.5 billion in sales Keytruda generated last year. Merck will need far more than that, but the company does have a plan.

Some of its acquisitions have yet to yield approved products with blockbuster potential. In 2023, the company paid $10.8 billion for Prometheus Biosciences and its promising candidate for ulcerative colitis, MK-7240. That could be another great addition to the company's portfolio, provided it aces enough clinical trials to land regulatory approval from the FDA.

Merck isn't just relying on buyouts to plan for its post-Keytruda life, though. One of the company's most important internally developed projects is a subcutaneous (SC) version of its crown jewel. SC Keytruda recently aced a phase 3 clinical trial in which it proved noninferiority compared to the original, intravenous version of the medicine in treating patients with non-small cell lung cancer, one of Keytruda's most important markets.

The newer version of the cancer therapy does have some advantages over the old, though, including significantly cutting the time patients spend in the treatment room and the time physicians spend preparing the therapy, administering it, and monitoring patients afterward.

SC Keytruda should attract plenty of business across many of the original's indications once all is said and done. And, together with the newer therapies Merck now has under its banner, should allow the company to smooth out the losses once biosimilar competition for Keytruda enters the market.

The stock could perform well post-Keytruda

Merck currently has more than 80 programs across its phase 2 and phase 3 pipeline. So, even beyond the candidates mentioned, the company should be able to find new gems.

Putting aside label expansions for existing medicines, even a 25% success rate on brand-new clinical compounds should translate to several novel launches over the next five years. Not all will be blockbusters, but Merck's deep pipeline and recent moves show that it is capable of moving beyond Keytruda.

Additionally, there are other reasons to consider buying the stock. First, Merck's shares look incredibly cheap right now. The company is trading at 9.3 times forward earnings estimates. The average for the healthcare sector is 16.2.

Second, Merck is a solid dividend stock. The company's forward yield sits around 4%, and it has increased its payouts by 88.8% in the past decade.

Merck's shares have lagged the market over the past year, but the company's prospects are still strong, at least for those willing to hold onto the stock for a while.

Should you invest $1,000 in Merck right now?

Before you buy stock in Merck, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Merck wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck. The Motley Fool has a disclosure policy.

Key Points

• DexCom has barely scratched the surface of its niche in the diabetes market.

• As a result of industry challenges, the stock's valuation has now come down.

• But from here, the stock looks well-positioned to deliver excellent results.

• 10 stocks we like better than DexCom ›

Medical device specialist DexCom (NASDAQ: DXCM) has encountered significant headwinds in the past year. The company's financial results haven't been quite up to the market's standards, and broader market volatility caused by President Donald Trump's trade policies isn't helping either. The stock is down 26% over the trailing-12-month period.

Yet even with all these challenges, DexCom could be a terrific performer in the next five years. Here's why.

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There's plenty of white space ahead

DexCom markets continuous glucose monitoring (CGM) systems, which are devices that help track blood sugar levels in patients with diabetes. CGMs have at least two advantages: They make measurements automatically, and they make them as often as every five minutes. Consistently monitoring blood glucose levels helps people with diabetes make better health decisions. That's why CGM devices lead to improved outcomes, including less time spent in hyperglycemia.

Image source: Getty Images.

DexCom has significantly increased its installed base over the years. In 2024, it had over 2.5 million customers worldwide. However, the company remains well-positioned to capitalize on a massive global opportunity.

In the U.S., DexCom estimates that there are more than 4.5 million diabetes patients on insulin therapy who aren't on CGM yet despite being eligible for third-party coverage for the technology. And that's just the U.S., one of the more advanced countries in terms of CGM penetration. DexCom has typically targeted patients who use insulin, and third-party payers have been more willing to cover these populations.

However, last year, it launched Stelo, an over-the-counter CGM option for diabetes patients who aren't on insulin and for people with prediabetes. This move significantly expanded the company's addressable market. CGM penetration in the U.S. for type 2 diabetes patients not on insulin is about 5%, and for prediabetes patients less than 1%.

DexCom's opportunities both within and outside the U.S. are massive. The increased adoption of CGM technology has helped its revenue and earnings grow steadily over the past decade, and this trend is likely to continue.

DXCM Revenue (Annual) data by YCharts.

DexCom's shares declined last year due to poor financial results; in the U.S., more patients than the company expected took advantage of rebates, leading to lower-than-expected revenue per customer. However, since there's still plenty of work to be done in the CGM market, DexCom can address that issue as it continues to make even more headway in this field. That will allow its financial results to improve.

Are DexCom's shares too expensive?

The stock's forward price-to-earnings ratio was recently 41.5, much higher than the healthcare sector's average of 15.8. But that forward P/E is on the low end compared to DexCom's average over the past few years:

DXCM PE Ratio (Forward) data by YCharts.

The medical device specialist has historically had steep valuation metrics, but has delivered market-beating returns anyway. In my view, DexCom can do the same in the next five to 10 years.

Investors might also be concerned about DexCom's main competitor in the CGM market, Abbott Laboratories. But these rivals have battled it out for years, and there's more than enough space for both to be successful, given the large worldwide CGM opportunity.

Furthermore, DexCom benefits from a network effect, as multiple companies have developed devices for diabetes patients that are compatible with its technology; these include insulin pens and pumps, third-party apps, and the Apple Watch. The more DexCom's installed base increases, the more attractive its ecosystem becomes to device or app developers looking to target a large population of patients.

And as these companies launch more technologies compatible with DexCom's CGM devices, they also become more appealing to patients. This dynamic makes it likely that DexCom will remain a leader in CGM well beyond the next five years. In the meantime, the stock could rebound from its poor performance last year, and deliver superior returns through the end of the decade.

Should you invest $1,000 in DexCom right now?

Before you buy stock in DexCom, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DexCom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories and Apple. The Motley Fool recommends DexCom and recommends the following options: long January 2027 $65 calls on DexCom and short January 2027 $75 calls on DexCom. The Motley Fool has a disclosure policy.

Key Points

• Exelixis' most important product should continue driving strong financial results through the end of the decade.

• The oncology specialist is working on a next-gen medicine that could be even better than its crown jewel.

• The midcap biotech looks well-positioned to deliver market-beating returns over the long run.

• 10 stocks we like better than Exelixis ›

A decade ago, shares of Exelixis (NASDAQ: EXEL), a biotech company specializing in oncology, were trading for under $10 per share. Today, the drugmaker's shares are changing hands for about $45 apiece. In other words, Exelixis has crushed the market since 2015.

Some might think there is little upside left for the stock after this run, but that's not the case. Read on to find out why Exelixis still has plenty of growth fuel left in the tank.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

EXEL Total Return Level data by YCharts.

Cabometyx is still doing the heavy lifting

Exelixis is best known for its cancer medicine, Cabometyx. First approved in the U.S. in 2016 for patients with renal cell carcinoma (RCC, a form of kidney cancer), it was a bit of a breakthrough as the first therapy to show significant improvements for RCC patients in three important measures: overall survival, progression-free survival, and objective response rate (the percentage of patients who respond to treatment).

Cabometyx has since earned numerous label expansions, and it continues to help drive solid top- and bottom-line growth for Exelixis. In the first quarter, the company's revenue jumped by 30.6% year over year to $555.4 million. The company's adjusted earnings per share (EPS) more than tripled to $0.62.

Image source: Getty Images.

Cabometyx has proven to be a successful pipeline drug, becoming the most prescribed tyrosine kinase inhibitor (a type of cancer drug that targets and kills cancer cells) among RCC patients, while making headway in hepatocellular carcinoma (liver cancer) and other markets.

Despite Cabometyx's success, though, Exelixis will need more to continue delivering above-average returns over the long run. Generic competition for the medicine is expected to enter the U.S. market by 2030. Thankfully, Exelixis is already preparing for that eventuality.

The next stage of growth

Exelixis aims to apply the same blueprint that has made it successful over the past decade: developing a cancer medicine that can become a standard of care in a niche with a high unmet need, while earning label expansions in many other markets. The company appears to have already discovered its next gem. Exelixis recently reported positive top-line phase 3 results for zanzalintinib in patients with metastatic colorectal cancer (CRC).

Despite having a high 5-year survival rate when caught early, CRC is the second-leading cause of cancer death worldwide partly because, once it has metastasized, there are few effective treatment options.

Exelixis is looking to change that with zanzalintinib, and the company's apparent phase 3 success suggests it might be able to pull it off. Furthermore, zanzalintinib is being investigated across other indications, including those where Cabometyx is dominant, such as RCC. The former seems to have a better safety profile than its predecessor, among several other advantages.

Beyond RCC and CRC, Exelixis plans to start several other late-stage studies for its next crown jewel this year, all of which will test it against current standards of care.

As they say, to be the best, you have to beat the best. That's what Exelixis aims to do with zanzalintinib. Exelixis expects zanzalintinib to generate about $5 billion in sales eventually, far exceeding Cabometyx's current total or, for that matter, Exelixis' annual revenue. There is still some work to be done to get there, but early signs suggest that zanzalintinib is an excellent candidate.

Exelixis' recent clinical progress also reinforces its leadership in oncology. The biotech company has several other early-stage candidates in development that could help it move beyond Cabometyx once it starts facing generic competition.

Can Exelixis get to $200?

From its current stock price of approximately $45, Exelixis needs a compound annual growth rate (CAGR) of at least 16.1% to reach $200 within the next decade and 10.5% to achieve this in 15 years. The former goal is ambitious, but the stock has delivered even better returns than that over the past decade. Although the past is no guarantee of future success, Exelixis' MO has remained the same and could, once again, allow it to generate monster returns over the long run as it makes significant clinical and regulatory progress with zanzalintinib and other pipeline candidates.

Even if it falls short of this goal, though, my view is that Exelixis is well-positioned to deliver market-beating returns to patient investors -- the 15-year path to $200 would still be impressive. Either way, the stock looks like a buy.

Should you invest $1,000 in Exelixis right now?

Before you buy stock in Exelixis, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Exelixis wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Prosper Junior Bakiny has positions in Exelixis. The Motley Fool has positions in and recommends Exelixis. The Motley Fool has a disclosure policy.

Key Points

• Microsoft is the second-largest company by market cap, behind Nvidia.

• The cloud computing leader is well positioned to be the next $4 trillion stock.

• Microsoft could continue to perform well long after it reaches $4 trillion.

• 10 stocks we like better than Microsoft ›

Nvidia (NASDAQ: NVDA) has been firing on all cylinders over the past two years, and the company just added one more accomplishment to its long list of medals: The chipmaker became the first stock to hit the $4 trillion mark. It now sits as the most valuable company in the world, but others are close behind.

Other corporations will eventually reach that valuation too, perhaps even sooner than many think. And the stock most likely to get to $4 trillion next is Microsoft (NASDAQ: MSFT). Read on to find out why.

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Why Microsoft has the clear edge

Most of the members of the "Magnificent Seven" have market caps above $1 trillion, but some are much closer to the $4 trillion mark than others. The two largest companies behind Nvidia are Apple, valued at $3.16 trillion, and Microsoft, at $3.72 trillion. The others are much further behind.

And while there's the possibility that they will soar while these two drop, assuming they all perform relatively similarly in the next few months, Microsoft will get there first simply because it's the closest.

However, Microsoft has an excellent chance of performing better than, at the very least, its closest competitor, Apple. The iPhone maker has been hit hard this year due to the current U.S. administration's trade policies. The Trump administration aims to bring manufacturing back to the United States, which poses a challenge for Apple, as the company outsources most of its manufacturing to countries such as China, a favorite target of Trump's aggressive tariffs, and other Asian nations.

Trump recently doubled down on his threat of aggressive tariffs. Additionally, Apple has fallen behind Microsoft and its tech peers in the artificial intelligence (AI) race. While I think Apple could still perform well over the long run, the company's short-term prospects don't look attractive.

What about Microsoft? The tech leader delivered excellent results during its latest update, which covered the third quarter of its fiscal year 2025, ending on March 31. Microsoft's cloud computing and AI businesses are booming. It has been gaining ground on Amazon in the competitive cloud field.

Further, the company's latest update provided strong guidance, indicating a growing demand for its services, despite a somewhat shaky macroeconomic environment. The smart money is on Microsoft outperforming Apple in the next few months.

Amazon, Alphabet, and Meta Platforms are also performing well, but with market caps of $2.36 trillion, $2.15 trillion, and $1.82 trillion, they are too far behind to make serious runs at the $4 trillion mark before Microsoft.

For all these reasons, Microsoft seems by far the most likely to join Nvidia in the $4 trillion single-company (for now) club next.

To $4 trillion and beyond

$4 trillion isn't a finish line. Once Microsoft reaches that point -- whenever that may be -- there will still be plenty of upside left for the company afterward. In fact, here is another prediction: Microsoft will reach a $10 trillion valuation within the next decade.

From its current levels, that would require a compound annual growth rate of at least 10.4%. That's no easy feat, but Microsoft can pull it off as the company continues to make headway within its two biggest sources of growth: AI and cloud computing.

While the company is already generating significant sales from these businesses, this is likely still the early stages of these industries' growth stories. According to Andy Jassy, CEO of Amazon, more than 85% of IT spending still occurs on-premises. Meanwhile, AI applications reached a new level a little less than three years ago with the launch of ChatGPT by OpenAI, a Microsoft-backed company. Both technologies enable businesses across all industries to reduce costs and increase efficiency.

Companies that don't use cloud computing or AI services might, eventually, become like modern businesses that don't use computers: They hardly exist. That could be the scale of the revolution investors are witnessing, and Microsoft is one of the leaders driving it. Though competition will continue to intensify, the tech giant has a strong competitive edge due to switching costs. Plus, it has already proven it can perform well despite competitive pressure from Alphabet and Amazon.

Microsoft's long-term prospects look attractive thanks to this duo of massive growth drivers. Investors shouldn't buy the stock because it could soon reach $4 trillion. They should purchase it because it will likely continue performing well long after that.

Should you invest $1,000 in Microsoft right now?

Before you buy stock in Microsoft, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Amazon, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Johnson & Johnson has delivered excellent returns to its long-term shareholders.

• One key factor behind the company's success is its ability to innovate.

• Despite various challenges, the drugmaker's strong business and dividend program make it attractive.

• 10 stocks we like better than Johnson & Johnson ›

Time is one of investors' greatest allies. With enough patience, even a relatively small sum of money invested in an excellent company can yield substantial returns, especially when dividends are reinvested.

Case in point: Shares of Johnson & Johnson (NYSE: JNJ), one of the world's largest healthcare companies, have increased by 4,720% over the past few decades. The stock may have garnered more headlines due to various legal challenges over the past few years, but it remains an excellent long-term option, especially for income seekers. Here's the rundown.

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JNJ Total Return Level data by YCharts.

The secret to Johnson & Johnson's success

Medical care is always in high demand: So long as we get sick, this is one sector that will never disappear. However, specific companies in the industry can cease to exist. One reason they do is their failure to innovate. Even if healthcare never sleeps, it does evolve, and it's critical for companies aiming to be successful over the long run to keep pace with that evolution. Johnson & Johnson has done that admirably over the years.

Consider its pharmaceutical segment. Last year, the drugmaker had more than 10 medicines that each generated over $1 billion in sales. In 2014, Johnson & Johnson also had more than 10 drugs that were blockbusters. Some of them were the same as last year's, but some weren't -- because the company has developed and marketed newer therapies over the past decade that have replaced older ones.

Image source: Getty Images.

In a decade, Johnson & Johnson's lineup of approved products will look different yet again. However, one thing won't change: It will still have many drugs that reach the $1 billion annual sales mark. J&J has more than 100 programs in its pipeline. True, many of those are for therapies seeking label expansions. But the company also has some brand-new clinical compounds, at least some of which will make it through the rigorous clinical-trial testing phases and go on to be massively successful.

And we haven't even mentioned Johnson & Johnson's medtech business, where it markets a range of medical devices across several major therapeutic areas. Its operations are well diversified in the healthcare sector. That, combined with the company's innovative qualities, makes it likely to remain a leader in healthcare for a long time.

Johnson & Johnson can overcome its challenges

Johnson & Johnson has encountered some headwinds in recent years. It's facing thousands of lawsuits from plaintiffs who allege that its talc-based products gave them cancer. The company has attempted to resolve these issues through various settlement proposals, but so far, to no avail. These legal battles are worth monitoring, but the stock is attractive despite them.

The company is not at serious risk of bankruptcy. That's why it still has an AAA credit rating, which is even higher than that of the U.S. government. Several judges have shot down its attempts to settle these lawsuits via a bankruptcy maneuver through a subsidiary, partly because of the company's underlying financial strength. While it's hard to know how this saga will end, my view is that Johnson & Johnson will continue performing well long after the dust settles.

Here's another potential challenge Johnson & Johnson faces: Some of its therapies will generate significantly less revenue in the next few years, due to either patent cliffs or Medicare price negotiations in the U.S. Here again, J&J can handle this threat. The company's innovative ability is the best way to overcome this problem.

The healthcare specialist can also count on its medtech unit to pick up some of the slack. One attractive opportunity in this segment is within the robotic-assisted surgery (RAS) niche. Johnson & Johnson is developing its Ottava RAS system, which should grant it plenty of long-term revenue opportunities and help it navigate patent cliffs.

Of course, we can't talk about J&J without mentioning its dividend. The company has increased its payouts for 62 consecutive years, which makes it a Dividend King. This streak highlights, once again, how strong Johnson & Johnson's business is -- most corporations don't even last six decades, let alone pay dividends for that long. The stock is an excellent pick for long-term, income-oriented investors.

Should you invest $1,000 in Johnson & Johnson right now?

Before you buy stock in Johnson & Johnson, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Johnson & Johnson wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

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*Stock Advisor returns as of July 7, 2025

Prosper Junior Bakiny has positions in Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Key Points

• Novo Nordisk's shares look attractive after a terrible performance over the past 12 months.

• DexCom has significant room to grow in its core market, despite disappointing results last year.

One of Warren Buffett's famous pieces of investing advice is to be greedy when others are fearful. One way to apply this wisdom is to look for companies that have lagged the market recently but still appear to be excellent long-term investment opportunities.

Two great examples today in the healthcare sector are Novo Nordisk (NYSE: NVO) and DexCom (NASDAQ: DXCM). Although these two corporations have encountered significant headwinds since last year, they could deliver market-beating returns to investors who initiate positions today and stick with them for at least a decade.

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1. Novo Nordisk

Novo Nordisk is coming off clinical setbacks and unimpressive financial results, at least by its lofty standards. The stock has significantly underperformed the market over the trailing-12-month period. But after this beating, the company's shares look attractive. Here are several reasons why.

First, although Novo Nordisk's eternal rival, Eli Lilly, appears to be taking the lead in the fast-growing weight management market, the former still has excellent prospects in this rapidly expanding therapeutic area.

Novo Nordisk's Wegovy continues to grow its sales at a good clip, and the company is awaiting approval from the U.S. Food and Drug Administration for an oral formulation of this popular medicine. Further, Novo Nordisk has promising internally developed pipeline candidates, such as amycretin, which recently entered phase 3 studies.

The Denmark-based drugmaker has also enhanced its pipeline in this area, thanks to licensing deals and acquisitions.

Second, Novo Nordisk has been working on diversifying its lineup and currently has promising pipeline candidates outside of its core treatment areas of diabetes and obesity. Novo Nordisk is developing medicines for conditions including hemophilia, Parkinson's disease, sickle cell disease, Alzheimer's disease, and others.

Third, after being southbound for the past 12 months, Novo Nordisk's shares look reasonably valued. The company's forward price-to-earnings ratio is 16.8, compared to the 16.3 average for the healthcare industry. Novo Nordisk's financial results over the past year have been terrific by industry standards, but not quite what the market expected. That may have justified the sell-off, but at current levels, the stock looks attractive.

Finally, Novo Nordisk is a solid dividend-paying company. It has increased its annual dividend per share by almost 284% over the past decade, while offering a forward yield of 2.3%. That's not exceptional, but it's above the S&P 500 index's average of 1.3%. Novo Nordisk is well-positioned to bounce back and deliver strong returns in the next decade as it rides weight management (and other) tailwinds.

2. DexCom

DexCom is a leading diabetes-focused medical device company. It develops continuous glucose monitoring (CGM) systems that help diabetics with constant blood sugar level measurements. DexCom has been successful thanks to the increased adoption of this innovative technology. Unlike blood glucose meters that are manually operated, use pesky and painful fingersticks, and can only tell a person's sugar level at one point in time, CGM devices are constantly monitoring things and automatically make measurements as often as every five minutes.

Rrevenue and earnings have grown rapidly over the past decade, but the company hit a speed bump last year when its top-line growth slowed considerably, partly due to higher-than-expected rebates in the U.S., resulting in lower revenue per patient. That said, these are short-term issues that do little to impact the company's long-term prospects. And on that front, there are still plenty of reasons to be excited about DexCom's future.

Consider that the company has ample room to grow, even in the U.S., a country that enjoys higher CGM penetration than most others. However, as DexCom has consistently pointed out, the population of patients who use CGM continues to lag behind those who are eligible for third-party coverage -- in other words, many people could obtain the technology paid for by insurers but have not yet opted in.

Further, there is a vast worldwide opportunity, since only a tiny percentage of the diabetics in the world use CGM technology. Though many are in countries where DexCom does not do business, the company has generally increased its addressable market by entering new geographies. In the next 10 years, expect the company to do the same while benefiting from greater insurance coverage for CGM -- third-party payers, including governments, have been more willing to foot the bill because of the technology's benefits.

All that should lead to consistent revenue and earnings growth for the medical device specialist. The stock has crushed the market in the past decade using this formula. In my view, it is well-positioned to do the same through 2035.

Should you invest $1,000 in Novo Nordisk right now?

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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Novo Nordisk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

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Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool recommends DexCom and Novo Nordisk and recommends the following options: long January 2027 $65 calls on DexCom and short January 2027 $75 calls on DexCom. The Motley Fool has a disclosure policy.

Key Points

• Healthcare giants AbbVie and Abbott Laboratories are both Dividend Kings.

• They should maintain their dividend growth habits for a long time to come.

• That's thanks to their solid businesses and promising product pipelines.

In 2013, AbbVie (NYSE: ABBV) became a publicly traded corporation after splitting from its former parent company, Abbott Laboratories (NYSE: ABT). Since then, both have produced strong returns and have been great picks for income-seeking investors, thanks to consistent payout hikes. That likely won't change soon.

These healthcare leaders should continue to perform well and reward shareholders with dividend increases for a long time. Read on to find out more.

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1. AbbVie

AbbVie is a pharmaceutical leader with a large portfolio of approved products, none more important than a duo of immunology medicines: Skyrizi and Rinvoq. In the first quarter, the company's revenue increased by 8.4% year over year to $13.3 billion, while its adjusted earnings per share came in at $2.46, 6.5% higher than the year-ago period. These results are all the more impressive considering AbbVie faced a major patent cliff just two years ago; however, it has since recovered, largely thanks to Skyrizi and Rinvoq.

The former generated $3.4 billion in sales during the period, representing a 70.5% year-over-year increase. Rinvoq's revenue came in at $1.7 billion, 57.2% higher than the year-ago period. Management predicts their combined annual sales will exceed $31 billion by 2027. Not only is that significantly higher than the $17.7 billion they racked up last year, it's also $4 billion higher than their previous guidance.

Skyrizi and Rinvoq are expected to drive top-line growth well into the 2030s. Although they will eventually lose patent protection, they demonstrate AbbVie's ability to navigate even the biggest patent cliffs, a quality that is essential for any pharmaceutical company to thrive over the long term. AbbVie has other products that help drive revenue growth, and, equally important, it has a deep pipeline that it routinely strengthens through acquisitions.

In March, the company announced a licensing deal with Denmark-based Gubra A/S for GUB014295, an investigational weight management therapy. AbbVie paid $350 million up front for this candidate, with potential milestones of $1.9 billion, not including royalties. AbbVie entered the fast-growing weight loss market with this move; GUB014295 might not pan out, but AbbVie's large pipeline, with approximately 90 products in development, should allow it to launch brand-new products frequently, navigate patent cliffs, and remain successful over the long run.

Now turning to the company's dividend, AbbVie has increased its payouts by 310% since 2013. And counting the time it spent under Abbott Laboratories' name, AbbVie is a Dividend King with 53 consecutive years of payout increases. These facts, from AbbVie's underlying business to the company's dividend track record, point to a company capable of sustaining a passive income program for a long time.

2. Abbott Laboratories

Abbott Laboratories is best known for its leadership in the medical device space, where it markets dozens of products across multiple therapeutic areas. The company also operates a diagnostic business and has a presence in the pharmaceutical and nutrition industries. Abbott Laboratories' operations are diversified, which can help it overcome challenges in specific segments. That's one of the company's strengths.

Here's another: Abbott Laboratories has been a leader in the highly regulated healthcare sector for decades. The company has built a solid reputation with physicians and consumers, all of whom are more likely to gravitate toward the brands they know and trust. In the medical device field, Abbott is a trusted brand. And thanks to its vast portfolio, it generates consistent revenue and earnings.

Abbott's biggest growth driver in recent years has been its diabetes care segment, led by its continuous glucose monitoring (CGM) franchise, the FreeStyle Libre. As the company noted, the FreeStyle Libre has become the most successful medical device in history in terms of dollar sales. That's no small feat. Yet there is still massive whitespace ahead, since only a small portion of the world's diabetics use CGM technology despite its advantages.

Abbott's work in this niche should provide a powerful long-term tailwind, but there will be many others. The company boasts other growth drivers, including its structural heart segment, where it markets a range of successful devices, such as its MitraClip device, a leader in its mitral valve repair niche. Beyond any single product, Abbott Laboratories has a proven track record as an innovator and should continue launching newer and better ones.

Lastly, Abbott is also a Dividend King, and over the past decade, it has increased its payouts by almost 146%. Abbott Laboratories' business is built to last. Investors who purchase the company's shares today can expect consistent dividend growth over the long term.

Should you invest $1,000 in AbbVie right now?

Before you buy stock in AbbVie, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AbbVie wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 30, 2025

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Abbott Laboratories. The Motley Fool has a disclosure policy.

Key Points

• Netflix and Roku are longtime streaming leaders with excellent prospects.

• Both companies should benefit as streaming viewing hours increase.

• They can deliver above-average returns over the next decade.

Streaming giants Netflix (NASDAQ: NFLX) and Roku (NASDAQ: ROKU) have a lot in common. The former was an early investor in the latter. They both dominate their respective niches in the streaming industry and have produced market-beating returns over the long term.

Here's one more thing Netflix and Roku have in common: excellent long-term prospects that could lead to substantial gains over the next decade. Here's the bull thesis for these market leaders.

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1. Netflix

Netflix has been firing on all cylinders thanks to its excellent financial results. In the first quarter, the company's revenue increased by 12.5% year over year to $10.5 billion. Netflix's earnings per share of $6.61 was up 25%, while its free cash flow came in at $2.7 billion, 24.5% higher than the year-ago period.

Image source: Getty Images.

Netflix is posting strong financials despite mounting competition in the streaming industry, which some thought would eventually erode its market share. But as evidence of the strength of its brand power, the company recently increased its prices once again. Netflix's ability to thrive even as new streaming services keep popping up says a lot about its prospects.

Streaming still has significant room to grow as the switch from cable continues. The company estimates a $650 billion revenue opportunity, which dwarfs its trailing-12-month revenue of $40.2 billion.

Over the next decade, it could make significant headway into this enormous, untapped potential. If Netflix can grab 10% of its total addressable market, its top line should grow at a good clip through 2035. The company's strategy to achieve that feat should remain the same: Create content that viewers love to watch and that spreads through word of mouth, leading to more paid subscribers on its platform, more data to help guide content production, and even better content.

A wonderful network effect has powered Netflix's success for a while now. There will be some challenges, including more competition and economic issues that might make people hesitant to put up with its price hikes, among others. However, Netflix has consistently demonstrated its ability to perform well despite these challenges, and I expect the company to continue doing so over the next decade.

The stock is still worth buying after the impressive run it has had over the past year. With $5,000, investors can afford three of the company's shares.

2. Roku

Roku's platform enables people to access most of the major streaming services, making the company's ecosystem an attractive hub for advertisers to target consumers. That's how Roku makes the lion's share of its revenue. Although it has encountered some headwinds in recent years -- including a slowdown in ad spending and declining average revenue per user (ARPU) -- Roku has somewhat recovered over the trailing-12-month period.

In the first quarter, the company's revenue increased by 16% year over year to approximately $1 billion. Roku's streaming hours were 35.8 billion, 5.1 billion more than the year-ago period. However, Roku remains unprofitable, although it is also making progress on the bottom line. The streaming leader's net loss per share in the period came in at $0.19, much better than the $0.35 reported in the prior-year quarter.

Although long-term investors may be concerned about the persistent red ink on the bottom line, recent developments show why Roku is a promising stock to hold onto. The company signed a partnership with Amazon, another leader in the connected TV (CTV) space. The two will grant advertisers access to their combined audiences, comprising 80 million households in the U.S. and more than 80% of the CTV market, through Amazon's demand-side ad platform.

This initiative will give advertisers far more bang for their buck, as early tests of the integration show. It also highlights the value of Roku's ecosystem, the leading one in the CTV space in North America. Over time, the company's platform will attract more advertising dollars, especially as streaming viewing time continues to increase. That's why investors should look past the red ink, for now. Roku's long-term prospects remain intact.

Even its ARPU decline in recent quarters was due to its focus on expanding its audience in certain international markets; it is still early in its monetization efforts in those regions. As Roku's initiatives in these places ramp up, while the company continues to make headway in more mature markets, Roku should eventually become profitable and deliver strong returns along the way.

The stock is worth investing in today for the next decade, and $5,000 is good for 56 shares of the company with some spare change.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Netflix, and Roku. The Motley Fool has a disclosure policy.

Key Points

• Investing in attractive dividend growth stocks can lead to superior long-term returns.

• The two healthcare companies below generally deliver excellent returns and dividend growth.

• Both have long-term tailwinds that can allow them to maintain solid performances over the long run.

For investors focused on the long game, there is little reason to sell -- at least, so long as a company generates solid returns through consistently improving financial results, regularly increases its dividend (if it pays one), and maintains strong growth prospects. Although it's sometimes difficult to find corporations that can do all that over long periods, stocks of this caliber do exist.

Consider the following two healthcare leaders: Zoetis (NYSE: ZTS) and Eli Lilly (NYSE: LLY). They have checked all of those boxes over the past decade, and there are good reasons to believe they can continue to do so for a very long time, making them excellent "forever" stocks. Read on to learn more about these companies.

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1. Zoetis

Zoetis is a leading animal health company with a diverse portfolio of products spanning various categories, including livestock, companion animals, and more. The company has 15 products that generate over $100 million in annual sales and consistently grows its revenue at a rate faster than most of its peers. Between 2014 and 2023, the company's top line increased at a compound annual growth rate of 8%, compared to the 5% the industry average.

The company has encountered some headwinds recently. Most notably, recent drug approvals by competitors could challenge the market share of one of Zoetis' most significant growth drivers, Apoquel, which helps treat allergic itch in dogs. Even so, Zoetis has dealt with competition for years and has still performed well. Although this issue may somewhat affect its results in the short term, the company's prospects look attractive for several reasons. First, Zoetis will continue to launch newer products.

It has proven itself to be an innovative leader in the animal health industry. Some of Zoetis' recent approvals, such as Solensia (first approved in 2022) and Librela (first approved in 2023) -- which treat osteoarthritis pain in cats and dogs, respectively -- are already helping drive sales growth. There will undoubtedly be plenty more such commercial launches in the future.

In the long run, Zoetis will benefit from the growth in the pet population, which has been ongoing for several decades in countries like the U.S., as well as other trends such as increased demand for protein sources due to human population growth, resulting in a greater need for products that help care for livestock. Zoetis can ride these tailwinds for a very long time.

Finally, the company offers a solid dividend program, despite a forward yield of just 1.3%, which is equal to the average yield for the S&P 500 index. Still, Zoetis' payouts have increased by an impressive 502% over the past decade. Yet its payout ratio of 31.6% remains conservative. There is ample space for more dividend hikes for Zoetis. Expect the company to offer consistent payouts and solid returns over the long run.

2. Eli Lilly

Eli Lilly has garnered significant attention in the past five years for its work in weight management, but the company has also quietly increased its dividends at a steady pace. The drugmaker's payouts have doubled over the past five years. That's not surprising. Eli Lilly's business seems to be firing on all cylinders. Revenue and earnings have been growing rapidly. The company's first-quarter top line jumped 45% year over year to $12.7 billion.

Most similarly sized pharmaceutical leaders would be thrilled to increase their revenue by a third of that percentage. That speaks volumes about Eli Lilly. And while its recent clinical and regulatory successes in the anti-obesity space are doing most of the heavy lifting, the company isn't a one-trick pony. Eli Lilly has blockbuster medicines in other areas, such as immunology -- with Taltz -- and oncology, thanks to Verzenio.

Even the company's pipeline is diversified across multiple therapeutic areas. It has recent approvals, too. Such products as Kisunla, which treats Alzheimer's disease, could eventually generate more than $1 billion in annual sales. Here's the point: Eli Lilly is an incredibly innovative company with a leadership position in diabetes and obesity, as well as significant footprints in other fields. The company is well positioned to develop new and improved products while generating above-average returns over the long term.

That's why dividend investors shouldn't be turned off by the company's low 0.8% forward yield. Eli Lilly's solid track record and modest cash payout ratio of 44% tell us plenty. That, combined with Eli Lilly's strong underlying business, makes it an attractive buy-and-hold option.

Should you invest $1,000 in Eli Lilly right now?

Before you buy stock in Eli Lilly, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 30, 2025

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has positions in and recommends Zoetis. The Motley Fool has a disclosure policy.

Key Points

• Iovance Biotherapeutics has proven to be an innovative biotech.

• However, the stock has declined significantly over the past year, partly due to its risk profile.

• Too much would have to fall Iovance's way for the stock to be a millionaire maker.

Over the past two years, Iovance Biotherapeutics (NASDAQ: IOVA), a small-cap biotech company, has made significant clinical and regulatory progress. However, the stock has also plunged over this period -- shares are currently trading for less than $2 apiece. Penny stocks tend to be risky, but Iovance Biotherapeutics has an exciting approved product and several potential catalysts that could jolt its stock price.

If Iovance Biotherapeutics' long-term plans come to fruition, the stock could skyrocket from current levels and deliver the kinds of returns over the next two decades (or so) that could help one become a millionaire. How likely is that to happen? Let's find out.

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An innovative approach to treating cancer

Iovance Biotherapeutics' claim to fame is that it developed Amtagvi, a medicine for advanced melanoma (skin cancer). There are at least two important things to note about this product. First, it is manufactured from patients' tumor-infiltrating lymphocytes (TILs), a type of white blood cell that destroys cancer cells. Second, Amtagvi became the first medicine of its kind approved by the U.S. Food and Drug Administration for the treatment of metastatic melanoma.

It's not surprising, then, that Amtagvi's sales have been growing at a good clip. Iovance Biotherapeutics expects to generate $275 million this year (at the midpoint) after racking up $164.1 million in revenue last year. The company's long-term strategy seems simple enough. It is currently seeking approval for Amtagvi in other regions, after which it will look to earn label expansions for the medicine.

Then, Iovance Biotherapeutics will work on developing other TIL-based therapies. If all of that happens without a hitch, Iovance Biotherapeutics could, indeed, generate life-changing returns from its current levels.

Will Iovance's breakthroughs be enough?

Suppose one invests $100,000 in Iovance Biotherapeutics today. It will take a compound annual growth rate of 12.2% to get to $1 million in 20 years, which is above the S&P 500's historical return. It's hard to bet on Iovance Biotherapeutics accomplishing such a feat despite its Amtagvi-related success. The medicine was a significant breakthrough and could achieve blockbuster status at some point. Even so, one issue with Amtagvi is that it is a complex medicine to administer.

The procedure requires collecting patients' cells, which are used to manufacture the therapy. It takes 34 days for the manufacturing work to be completed. Further, Iovance Biotherapeutics recently revised its guidance downward from between $400 million and $450 million for fiscal year 2025. It did so because it had miscalculated the timeline for the activation of authorized treatment centers where Amtagvi is administered.

Launch dynamics are complex for any medicine, but they are even more so for therapies like Amtagvi. This factor significantly complicates matters for Iovance Biotherapeutics, making the stock less attractive, as it impacts its revenue and earnings potential. In the meantime, the company estimates that it only has sufficient cash to keep the lights on until the second half of 2026. That's before we account for other obvious potential issues.

Consider that a lot would have to go right for Iovance Biotherapeutics to perform well through the next two decades. It will need to record consistent clinical and regulatory wins. Setbacks, particularly with otherwise promising products or pipeline candidates, will sink its stock price. That's the risk biotech investors have to live with, and the risk is far higher when dealing with a smaller drugmaker like Iovance. Perhaps Iovance Biotherapeutics will perform well regardless, but it's hard to bet on that happening, considering it has yet to establish itself.

The company currently has only two products on the market, remains unprofitable, and has only enough cash for the next two and a half years, facing some uncertainty due to the complexity of the therapies it markets. Between potential clinical trial failures, regulatory rejections, and the possibility that Iovance Biotherapeutics may have to resort to dilutive financing, the stock appears far too risky for most investors. It's worth keeping Iovance Biotherapeutics on your watchlist and considering investing small sums in the stock if its prospects improve.

Should you invest $1,000 in Iovance Biotherapeutics right now?

Before you buy stock in Iovance Biotherapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Iovance Biotherapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 30, 2025

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Iovance Biotherapeutics. The Motley Fool has a disclosure policy.

Key Points

• CRISPR Therapeutics could stage a comeback thanks to clinical and commercial progress.

• Viking Therapeutics looks like a good bet on the fast-growing weight management market.

There are many promising corporations that investors can buy on a dip due to recent market volatility or company-specific issues that predate this year. Take, for instance, CRISPR Therapeutics (NASDAQ: CRSP) and Viking Therapeutics (NASDAQ: VKTX), two mid-cap biotech companies that have lagged broader equities over the trailing-12-month period.

Even with these poor performances, however, there are solid reasons to consider investing in these stocks, especially at current levels. Read on to find out more.

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1. CRISPR Therapeutics

CRISPR Therapeutics made a breakthrough when it created Casgevy, the first gene-editing medicine that used the Nobel Prize-winning CRISPR technique to earn approval. The stock performed well from its 2016 initial public offering (IPO) until about 2021 but has been on a downward trajectory ever since for three reasons.

First, clinical progress is one of the most significant drivers of the performance of smaller biotech stocks. Once they start hitting major milestones, investors tend to take some profits.

Second, Casgevy is a gene-editing therapy that's complex to administer. Despite earning approval in late 2023, the therapy hasn't yet contributed much to CRISPR Therapeutics' results.

Third, the company is unprofitable. That's a big no-no in the current precarious market environment.

That said, CRISPR Therapeutics' next breakthrough could help the stock bounce back. The company is developing several promising medicines and expects data readouts for ongoing clinical trials as early as this year.

CRISPR Therapeutics is targeting challenging areas. The biotech is looking to develop medicines for type 1 diabetes, some hard-to-treat cancers, and other areas. Progress on these fronts could send the stock soaring.

Furthermore, Casgevy will ultimately have a significant impact on CRISPR Therapeutics' financial results. The company will share the profits from this medicine with giant drugmaker Vertex Pharmaceuticals, its collaborator in the development of this medicine, but CRISPR Therapeutics' partnership with Vertex was a net positive for the smaller biotech.

For one, CRISPR Therapeutics probably would not have earned approval for the treatment as quickly as it did in some places, including some countries in the Middle East, where the medicine boasts a more substantial commercial opportunity for Casgevy than the U.S. Securing approval and commercialization in the Middle East alone would have been far too expensive for a smaller drugmaker. Second, partly due to its long-standing partnership with Vertex, CRISPR Therapeutics has a substantial amount of liquidity, ending the first quarter with $1.86 billion in cash and equivalents.

Lastly, Casgevy has blockbuster potential. It costs $2.2 million per treatment course in the U.S., while the two partners estimate about 60,000 patients in their target geographies. Between Casgevy's long-term potential and the company's innovative pipeline, CRISPR Therapeutics could eventually recover and deliver exceptional returns to investors who stay the course.

2. Viking Therapeutics

Viking Therapeutics was a relatively unknown biotech until last year, when it produced strong phase 2 results for VK2735, an investigational weight management therapy. Although the stock soared following this data readout, it hasn't performed well since.

Nothing has gone wrong with Viking Therapeutics' leading candidate -- it's just another case of investors taking some profits. However, Viking Therapeutics looks attractive for several reasons.

The market for anti-obesity therapies is rapidly growing. There are scores of investigational therapies in this field, but most haven't delivered the kind of mid-stage data VK2735 has. The biotech company also has an oral formulation of VK2735 that's currently in Phase 2 studies.

Furthermore, Viking Therapeutics has several other candidates in development. The company's VK2809 is a potential treatment for metabolic dysfunction-associated steatohepatitis, which is also entering phase 3 studies after completing mid-stage trials.

Lastly, Viking's VK0214 is being developed for X-linked adrenoleukodystrophy, a rare genetic disorder affecting the nervous system. VK0214 has earned the orphan drug designation from the U.S. Food and Drug Administration, an honor reserved for medicines that have shown promising clinical data for the treatment of an orphan (or rare) disease with unmet needs.

Viking Therapeutics' pipeline is impressive for a biotech company worth just $3 billion. If it achieves clinical and regulatory successes in the coming years, its share price will likely skyrocket.

There is some risk involved here, as is always the case with clinical-stage biotechs. The stock could drop if it encounters setbacks, particularly with its leading candidate, VK2735. It's important to keep that in mind. But investors comfortable with the volatility should strongly consider initiating a small position in Viking Therapeutics.

Should you invest $1,000 in CRISPR Therapeutics right now?

Before you buy stock in CRISPR Therapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CRISPR Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

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Prosper Junior Bakiny has positions in Vertex Pharmaceuticals and Viking Therapeutics. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool recommends Viking Therapeutics. The Motley Fool has a disclosure policy.

Getting investing ideas and inspiration from the most successful money managers on Wall Street isn't a bad approach, but you should still do your due diligence before pressing the buy button. Let's apply that strategy by looking at Pershing Square Capital Management, a hedge fund led by the billionaire Bill Ackman.

A sizable percentage -- 41.6%, to be exact -- of the hedge fund's portfolio is in three companies: Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Uber Technologies (NYSE: UBER), and Chipotle Mexican Grill (NYSE: CMG). Should you consider following Ackman's lead with these stocks? In my view, the answer is a resounding yes for all three.

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Alphabet -- 14% of portfolio

About 14% of Ackman's portfolio is invested in Alphabet, including more than 5.7% in the class A shares that grant its holders voting rights, and nearly 8.3% in the non-voting class C shares. Alphabet was not a great stock to hold in the first half of the year. Even considering market volatility, shares underperformed the broader market by a significant margin.

However, this isn't because the company's financial results aren't strong. It's more likely that the market is pricing in several specific risks Alphabet faces, including the possibility that U.S. regulators will succeed in forcing it to get rid of its Chrome web browser following an antitrust lawsuit.

Still, there are good reasons to be optimistic about Alphabet's future, particularly when you consider its cloud computing and artificial intelligence (AI) businesses. According to Amazon CEO Andy Jassy, both industries are still in their early innings. Alphabet is a leader in both, and should benefit as these markets embark on a journey of significant long-term growth.

The company can also rely on its streaming ambitions with YouTube, one of the most popular platforms around. Furthermore, Alphabet benefits from a wide moat thanks to network effects and switching costs. Even with the antitrust threat, the company looks attractive once we focus on its growth opportunities and consistent earnings and cash flow.

If you're a long-term investor, I think you should seriously consider adding the stock to your portfolio.

Uber Technologies -- 18.5% of portfolio

As of the first quarter, Uber Technologies was Pershing Square Capital Management's largest holding. In fact, the fund opened its position in the ride-hailing specialist during the period, acquiring some 30.3 million shares of the company.

Now is as good a time as any to get on the Uber bandwagon. Over the past couple of years, it has evolved into a profitable company that also generates substantial cash flow. In the first quarter, Uber's revenue grew by a solid 14% year over year to $11.5 billion. Net income was $1.8 billion compared to a net loss of $654 million in the year-ago period, while free cash flow soared by 66% year over year to $2.3 billion.

More important than its recent results, though, are Uber's still-strong prospects, thanks in part to its platform's network effect. More drivers within its ecosystem make it more attractive to clients. Uber may have competition for its services, but its trips and gross bookings far exceed those of its biggest direct challenger, Lyft. That says something about the company's competitive edge.

Uber has substantial long-term prospects. One reason is that younger generations are driving less, which will, over the long run, create a greater need for the kinds of services the company offers. While Uber's stock has performed well this year, it's not too late to get in on the act yet.

Chipotle Mexican Grill -- 9.1% of portfolio

Chipotle comes in at roughly 9% of Pershing Square Capital Management's portfolio. Here's another company that has not performed well in 2025, partly because of the potential impact of tariffs on its financial results. Chipotle imports ingredients for its famous bowls from various places around the world, and President Donald Trump's trade agenda could lead to cost increases for the restaurant chain.

Even beyond that, Chipotle's first-quarter results were not a hit due to weak foot traffic within its stores.

Do these issues justify giving up on the stock? My view is that they don't. Chipotle is a consistently profitable business with strong restaurant-level margins and attractive growth prospects. Economic conditions are likely affecting consumers' decisions to pull away from Chipotle right now, but that won't last forever.

Meanwhile, the company continues to add new locations; it opened 57 restaurants during the first quarter. Chipotle's long-term goal is to get to 7,000 locations in the U.S. and Canada; it currently has 3,800 restaurants worldwide. Its expansion plans in the U.S., Canada, and elsewhere provide significant long-term growth potential.

Chipotle might be struggling right now, but for long-term investors, the recent dip is an excellent opportunity to buy its shares.

Should you invest $1,000 in Uber Technologies right now?

Before you buy stock in Uber Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Uber Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.

Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Chipotle Mexican Grill, and Uber Technologies. The Motley Fool recommends Lyft and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Dividend investors loathe payout cuts, but sometimes they are necessary for a corporation facing significant headwinds to get back on track. Take Medical Properties Trust (NYSE: MPW), a healthcare-focused real estate investment trust (REIT). The company has struggled over the past two years due to tenant-related issues. It had to cut its dividends twice as a result. However, MPT has made significant strides in the right direction, and the company may soon resume raising its dividends. Here's the rundown.

MPT has started righting the ship

The REIT business seems somewhat stable. These companies operate real estate properties that they rent out to businesses, collecting regular and consistent rental income. Easy enough. REITs in the healthcare sector can appear even more reliable, as medical care remains in high demand regardless of economic conditions. However, even health-focused businesses can encounter issues and go bankrupt. That's what happened to two of MPT's former tenants, including one that was, at some point, its largest. The company's financial results took a significant hit. It hasn't recovered yet. MPT's revenue is still moving in the wrong direction.

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But the comeback has already begun. MPT found multiple new tenants to occupy most of the facilities formerly rented out by its then-largest client that went bankrupt. Among other things, that means the company's portfolio is now more diversified. One or two tenants going out of business is unlikely to affect MPT as much as it did last time. The new contracts it signed with its new renters have an average lease of 18 years. Regular rental income for almost two decades provides MPT with some security, provided, of course, these new tenants don't go out of business, too. While that could certainly happen, these moves make the company far more stable than it was when its troubles first started.

Why the dividend could go up

MPT's quarterly dividend per share went from $0.29 to $0.15 to $0.08 in less than two years. Not only was it dealing with rapidly declining revenue, but it also had pressing financial obligations that needed to be addressed.

MPT has worked to solve both problems. The company's new tenants aren't paying the full rental amount due -- at least not yet. They began doing so only in the first quarter, and they are currently paying only a fraction of it.

They will gradually increase rent payments to 100% of the due amount by the fourth quarter of 2026. By the time MPT starts collecting the full amount, its revenue should move in the right direction since it expects about $160 million in rental revenue from these facilities.

In the first quarter, the company's revenue declined by 17.5% year over year to $223.8 million; $160 million represents more than half of its first-quarter revenue. Even assuming the $223.8 million included 50% of the full rental income it will receive from these new tenants by the fourth quarter of 2026 (it doesn't, the payments will reach 50% by the end of this year), it would still mean that MPT would be adding $80 million in revenue by the end of next year.

Adding that to its first-quarter revenue would have led to year-over-year top-line growth of 12% compared to the first quarter of 2024. Decent revenue growth awaits MPT, and that will allow it to improve its bottom-line numbers as well. Further, the company has improved its balance sheet. MPT sold some facilities to raise money and pay down debt, amounting to $2.2 billion between early 2023 and the end of 2024.

It's harder for a company to raise dividends when it has to worry about upcoming obligations. However, the recent moves MPT made, which also included refinancing existing debt, have granted it far more financial flexibility. The stage is set for MPT to start growing its dividend again. Don't expect a massive hike, but with a stable payout program that could start growing again next year and a 7.3% forward yield, the company is far more attractive as an income stock than it was just two years ago. Yet, the stock is still down by 51% over this period.

In my view, it's still time to buy the stock. MPT's shares should move in the right direction as its comeback continues.

Should you invest $1,000 in Medical Properties Trust right now?

Before you buy stock in Medical Properties Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medical Properties Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 23, 2025

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Growth and income investing may be two distinct styles, but it's possible to combine them by selecting the right stocks. Some corporations have excellent growth prospects and also offer dividend programs that seem at least somewhat reliable.

Two examples in that department are Meta Platforms (NASDAQ: META) and Booking Holdings (NASDAQ: BKNG). Although they are new dividend payers, these market leaders' strong underlying businesses mean they should reward shareholders with consistent dividends for a long time while also capitalizing on significant growth opportunities.

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Let me explain.

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1. Meta Platforms

Meta Platforms is the leading social media company. It boasts 3.43 billion daily active users across its websites and apps -- that's pretty close to half of the 8 billion people on Earth, a total that includes many who are too young to be on any of the company's platforms. Meta's deep ecosystem makes it an excellent target for advertisers. That's how it generates most of its sales, and that business is still booming.

In the first quarter, Meta Platforms' revenue increased by 16% year over year to $42.3 billion. The tech leader's earnings per share (EPS) came in at $6.43, 37% higher than the year-ago period.

Here's the good news for investors: Meta Platforms' business is getting even better thanks to artificial intelligence (AI). The company has used AI-powered algorithms to increase engagement on its apps. That means more time spent on Facebook and Instagram, which naturally leads to greater demand for ads and higher revenue. Meta Platforms is also utilizing AI to enhance the ad launch process. Management aims to fully automate this system by the end of 2026.

These initiatives could have a significantly positive impact on Meta Platforms' performance in the long run. That's why the company is doubling down with massive investments in AI infrastructure, to the tune of $65 billion this year, according to some reports.

The company also has other growth opportunities, including business messaging on WhatsApp. Although economic and trade concerns could continue to impact the stock -- Meta lost some ad revenue from Asia-based retailers in the first quarter -- the company should still deliver strong results thanks to the lucrative opportunities at its disposal.

Lastly, Meta Platforms initiated a quarterly dividend last year. The company offers a quarterly dividend of approximately $0.52 per share. Meta's payouts look safe, and although it doesn't have a substantial dividend history yet, investors can benefit from the growth and income it will provide in the next five years and beyond.

2. Booking Holdings

Booking Holdings helps travelers plan for their trips by providing everything from flights to accommodations, car rentals, and activities. The company operates an ecosystem of websites that includes its namesake, Priceline, as well as Kayak and others. Booking Holdings' famous brands and ecosystem grant it a network effect. The more people join one of its platforms, the more attractive it is for hotels or car rental companies, and vice versa.

That's why Booking Holdings remains one of the undisputed leaders in this niche. Financial results remain robust, too. In the first quarter, the company's revenue increased by 8% year over year to $4.8 billion. While that's not too impressive, Booking Holdings' adjusted EPS was up by a juicier 22% year over year to $24.81, while its free cash flow jumped to $3.2 billion, 23% higher than the year-ago period.

Booking Holdings' business could also be impacted by tariffs, particularly if they lead to economic issues, a decline in consumer spending, and lower travel demand. People are less likely to splurge on expensive vacations if the economy is rough. That's nothing new for Booking Holdings, though. Even if it faces some near-term uncertainty due to the state of the economy, the company's prospects are intact.

The travel and accommodation industries should maintain an upward trajectory, in the long run, thanks to factors like an increasing worldwide population and gross domestic product growth. Meanwhile, Booking Holdings is also leveraging the power of AI to enhance its business. It introduced an AI-powered travel planning tool and plans to implement many more initiatives that could make its platform even more attractive.

That's an excellent sign for the future. Booking Holdings began paying dividends last year, with an initial quarterly dividend of $8.75 per share, which has since increased to $9.60. Booking Holdings' shares aren't cheap -- they are trading for just under $5,400 apiece. Thankfully, most online brokers now offer fractional shares. Booking Holdings is worth the money for growth investors who also want some dividends on the side.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Meta Platforms. The Motley Fool has positions in and recommends Booking Holdings and Meta Platforms. The Motley Fool has a disclosure policy.

Popular themes on Wall Street today include artificial intelligence (AI), the market for weight management medicines, and the potential impact of tariffs on broader equities and the economy. In 10 years, there will probably be a different set of trending topics on The Street, but those changes won't stop the market from delivering competitive returns over the next decade.

Those who want to cash in on that can purchase exchange-traded funds (ETFs) that track the performance of some major index, or invest in individual companies that are likely to perform better than the market in the next 10 years. For those opting for the second method, two great picks are Shopify (NASDAQ: SHOP) and Vertex Pharmaceuticals (NASDAQ: VRTX).

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1. Shopify

It's been 10 years since Shopify went public. In that time, the company has crushed the market, although it's been a bit of a volatile ride. While a lot has changed since 2015, Shopify's basic investment thesis remains the same: It is a leader in its niche of the fast-growing e-commerce market and boasts a strong moat.

Let's unpack that a little more. Shopify helps merchants build and customize online storefronts.

It offers them practically everything they need to run their stores, including inventory management, payment processing, the ability to cross-sell across social media websites, and much more. At the end of 2024, Shopify commanded more than 12% of the U.S. e-commerce market by gross merchandise volume.

Shopify's competitive edge comes from at least two sources: switching costs and network effects. Since merchants spend a significant amount of time building online stores on the company's platform and doing the necessary marketing work to attract clients, they won't want to switch and risk disrupting their day-to-day operations. That means Shopify is likely to keep most of its clients.

Elsewhere, the company has an app store with thousands of options that help merchants customize their websites. The more developers seek out the company's app store for their creations, the more attractive it is to merchants.

Turning to Shopify's long-term opportunity, the e-commerce market is on a growth path since it grants merchants a far larger pool of potential consumers, and vice versa. But more than 80% of retail transactions still happen offline, even in the U.S.

All these factors paint a bright picture for Shopify's future. Some might point out that the company still isn't profitable or that its forward price-to-sales multiple of almost 13 is more than six times higher than where the undervalued range starts, usually at 2 and under. However, Shopify has made significant changes to its business in recent years, which have helped boost its margins, including eliminating its expensive logistics business. The company should become consistently profitable within a few years.

Lastly, the stock is worth a premium considering its prospects. Although it may be volatile in the short term due to its rich valuation metrics, Shopify should deliver superior returns over the next decade. That's why the stock is a buy today.

2. Vertex Pharmaceuticals

Over the past year, Vertex Pharmaceuticals, a leading biotech, dealt with clinical setbacks and illegal copies of some of its medicines in Russia, which led to lower sales than it expected. Further, one of the company's newer approvals, Casgevy, still isn't generating much in revenue, despite first earning the green light in late 2023.

Casgevy is a gene-editing treatment for a pair of rare blood diseases. Gene-editing therapies are notoriously complex to administer, which is why it's taking a long time to ramp up revenue for this product.

Even so, Vertex Pharmaceuticals looks attractive. It is still the only game in town for patients with cystic fibrosis (CF), a rare lung disease. Vertex is the only biotech that has cracked the code so far, and it manufactures medicines that target the underlying causes of this condition, rather than just its symptoms.

Vertex's success in the CF field should continue to drive top- and bottom-line growth. Elsewhere, the company can count on other newer approvals.

In January, the U.S. Food and Drug Administration gave the nod to Journavx, the first oral non-opioid pain inhibitor. Even without potential label expansions, this medicine can achieve some decent success, considering there is a high unmet need for new, non-opioid pain treatments. According to some estimates, it could generate $2.9 billion in revenue by 2030.

The company should also continue expanding its lineup. It plans on sending applications for Zimislecel, a potential treatment for type 1 diabetes, to regulators next year. The drugmaker has several other promising early- and late-stage programs. Between Vertex's strong CF franchise, the multiple new products it is launching, and its solid pipeline, the stock should deliver superior returns through 2035.

Should you invest $1,000 in Shopify right now?

Before you buy stock in Shopify, consider this:

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Prosper Junior Bakiny has positions in Shopify and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Shopify and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.

Shares of Viking Therapeutics (NASDAQ: VKTX), a mid-cap biotech, are down by 34% this year. This poor performance may suggest that recent company-specific developments have rendered the stock less attractive or that it is being affected by broader market issues. The latter is true, at least to some extent, but Viking Therapeutics' thesis has not changed significantly this year. The drugmaker remains attractive compared to most of its similarly sized peers. Here is why.

Why the stock looks promising

Viking Therapeutics is a clinical-stage biotech. That means the company has no product on the market, generates no revenue, and is consistently unprofitable. Investors aren't too keen on buying shares of companies that fit this profile when broader equities are experiencing significant volatility due to potential macroeconomic issues. In fairness, that makes sense. Clinical-stage biotechs carry above-average risk. Their products may never see the light of day outside the clinic, and even when they do, many do not generate substantial revenue.

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However, Viking Therapeutics is a bit different. The company is developing medicines across several areas with high unmet needs. First, there is the drugmaker's work in the weight management space. The anti-obesity drug market has experienced significant growth in recent years. Yet, analysts continue to predict that the best is yet to come. Viking Therapeutics' leading candidate in this area, VK2735, is a dual GLP-1/GIP agonist. The only approved medicine of this kind on the market is Eli Lilly's Zepbound, an undisputed leader.

Being in the same class as Zepbound doesn't guarantee VK2735's success, but it's still worth pointing out that a similar mechanism of action that led to Zepbound's breakthrough and efficacy could also prove successful for Viking Therapeutics' crown jewel. And more importantly, the investigational medicine has produced better results than almost any other mid-stage candidate in weight management, outside of those being developed by Eli Lilly and Novo Nordisk. That's impressive for a mid-cap biotech, considering significantly larger drugmakers with far more resources are trying to dominate this market.

Viking Therapeutics' other mid-stage program, VK2809, performed well in patients with metabolic dysfunction-associated steatohepatitis (MASH), a disease with obesity as one of the main risk factors and whose prevalence is on the rise. However, the U.S. Food and Drug Administration approved just the first MASH medicine last year, although that will likely change soon.

The point, though, is that VK2809 could join a relatively young market in a few years and generate massive sales down the road. These two candidates set Viking Therapeutics apart from other clinical-stage biotech companies. It's also worth noting that Viking Therapeutics recently signed a multiyear manufacturing agreement with privately held CordenPharma for VK2735. Per the terms of the deal, CordenPharma will manufacture more than a billion oral formulations of the medicine annually, as well as over 100 million autoinjectors and another 100 million syringes per year.

Viking Therapeutics will make payments to CordenPharma, totaling $150 million through 2028. This deal highlights that Viking Therapeutics is already planning some post-commercial activity for its leading candidate. That's a great sign for investors.

Read the fine print

Viking Therapeutics is developing other candidates, including another weight management product that is still in preclinical studies. Following a similar blueprint, this product is a dual agonist that mimics the action of not just one but two gut hormones: amylin, which helps regulate blood sugar, and calcitonin, which regulates calcium levels. There is slow progress on that front, but Viking Therapeutics' commitment to innovation is impressive for such a small biotech. Now, Viking Therapeutics' most advanced programs could fail in phase 3 studies. If that happens, especially with VK2735, the stock price is likely to plummet.

That's a significant risk to consider. That's why the stock is probably not suitable for risk-averse investors. However, those who are comfortable with volatility should strongly consider initiating a small position in the stock. If the business goes under, which isn't that rare for smaller biotech companies, your losses will be relatively small so long as the company makes a tiny portion of your overall portfolio. But there is significant upside potential that those who invest in Viking Therapeutics today could enjoy over the long run.

Should you invest $1,000 in Viking Therapeutics right now?

Before you buy stock in Viking Therapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Viking Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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Prosper Junior Bakiny has positions in Eli Lilly, Novo Nordisk, and Viking Therapeutics. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.

Investors looking to cash in on the fast-growing market for weight management medicines will naturally turn to the two leaders in this area, Eli Lilly and Novo Nordisk. However, several other companies seem to have somewhat promising prospects in this field. This group includes Amgen (NASDAQ: AMGN) and Viking Therapeutics (NASDAQ: VKTX), two drugmakers that have produced phase 2 clinical trial data for their leading weight management candidates.

Despite these positive clinical developments, Amgen and Viking Therapeutics have performed poorly on the stock market in the past 12 months, though progress in this area might eventually help them bounce back. But which of these two biotechs should investors trying to profit from the rapid spending on anti-obesity medicines put their money in?

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The case for Amgen

Amgen's leading weight loss candidate is called MariTide. In November, the biotech reported that in a phase 2 study, the medicine led to an average weight loss of about 20% in overweight or obese patients after 52 weeks, with no weight loss plateau observed. Importantly, MariTide is administered subcutaneously once a month -- the current weight management leaders are taken once weekly. A less frequent dosing could appeal to many patients.

The market expected greater weight loss in this study. That's why Amgen's shares fell after it released its phase 2 results. However, the company's data still makes it somewhat likely that it will go on to carve out a solid niche in the rapidly growing weight loss area, although it won't dethrone the leaders.

Further, Amgen's prospects go well beyond its work in the anti-obesity market. The company's deep lineup allows it to generate consistent revenue and profits. In the first quarter, Amgen's sales increased by 9% year over year to $8.1 billion, while its adjusted earnings per share came in at $4.90, 24% higher than the year-ago period. Amgen has several growth drivers. Tezspire, an asthma medicine, is performing well, as is Prolia, a treatment for osteoporosis (a bone disease) in postmenopausal women.

Amgen also has a deep pipeline of investigational products besides MariTide that will eventually lead to brand-new medicines. Lastly, it is an excellent dividend stock. It offers a forward yield of 3.5% -- compared to the S&P 500 index's average of 1.3% -- and has increased its payouts by 201.3% in the past 10 years. Amgen could generate strong returns over the long run even if MariTide doesn't pan out.

The case for Viking Therapeutics

Viking Therapeutics is a clinical-stage biotech. The company's VK2735, its weight management candidate, looks promising. Last year, it reported that at the highest dose, the drug led to a placebo-adjusted mean weight loss of 13.1% (or 14.7% from baseline) after a mere 13 weeks. VK2735 is in the same class of drugs as Eli Lilly's Zepbound. It mimics the action of two gut hormones: GLP-1 and GIP. That doesn't guarantee that it will achieve the same kind of success, but so far, the data looks highly encouraging.

Viking Therapeutics has other candidates. The company's VK2809 targets metabolic dysfunction-associated steatohepatitis. It delivered solid phase 2 results last year. Viking Therapeutics is also developing an oral formulation of VK2735 that is currently in mid-stage studies, while VK0214 is an investigational treatment for a rare, nervous system disorder called X-linked adrenoleukodystrophy.

There is no approved treatment for the disease yet. Viking Therapeutics carries above-average risk, as do all biotech companies without a single product on the market. But if VK2735 aces phase 3 results and earns approval -- and Viking's other candidates pan out as well -- the stock could deliver substantial returns.

The verdict

Amgen is a well-established company that generates consistent financial results. It also pays a dividend. It is a far better option for low-risk, income-seeking investors. There is no contest there. However, Viking Therapeutics has far more upside potential. If the smaller biotech can deliver solid pipeline and regulatory progress in the next few years, its shares will likely skyrocket. Note that the company also has significant potential drawbacks. It could be more appealing for investors with a higher tolerance for volatility.

Should you invest $1,000 in Amgen right now?

Before you buy stock in Amgen, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amgen wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Prosper Junior Bakiny has positions in Eli Lilly, Novo Nordisk, and Viking Therapeutics. The Motley Fool has positions in and recommends Amgen. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.