2 No-Brainer Growth Stocks to Buy Right Now

2 No-Brainer Growth Stocks to Buy Right Now

Investing in the stock market is never without risk, but great companies with clear paths to growth can prevail despite short-term chaos. If you’re looking for profitable, growth-oriented companies with a proven track record of expanding through a wide range of economic cycles, you don’t have to look far.

Today, we’re going to look at two fast-growing healthcare stocks that not only are leading the way in their respective markets, but also still have abundant avenues of growth ahead of them that long-term investors can capitalize on.

1. Vertex Pharmaceuticals

Vertex Pharmaceuticals (VRTX 0.56%) has amassed a profitable, high-revenue growth business around a relatively small drug portfolio. However, these drugs all have one thing in common: they are the only products currently on the market that work to correct the underlying cause of the genetic disease of cystic fibrosis.

Together, these four products generated total revenue of $9 billion in 2022, an 18% increase over 2021. Net income totaled $3.3 billion for the 12-month period, up 42% from the previous one. This follows the three-year period in which the company’s annual revenue and net profit increased by 44% and 23% respectively.

While the potential market for Vertex’s existing portfolio of cystic fibrosis drugs is enormous – management estimates that up to 20,000 people worldwide could benefit from the company’s products but are not yet taking them – and indications supplements for these drugs expand its patient population, the company is looking for new sources of growth. It currently has an impressive product portfolio covering disease areas ranging from rare blood disorders to type 1 diabetes and acute pain.

During the company’s 2022 earnings call, CEO and President Reshma Kewalramani said each of its mid-to-late-stage clinical candidates “has the potential to be best-in-class and disease-transforming, and each represents a multi-billion dollar market.” Additionally, we see the potential to launch new products in five of these disease areas over the next five years or our goal of five out of five.

For investors looking for a profitable, high-growth healthcare company that is only in the early days of its global expansion strategy, Vertex Pharmaceuticals is a prime candidate to consider for a position at long term both in bull markets and bear markets.

2. DexCom

DexCom (DXCM -2.13%) builds on its most recent victory, the approval of its latest Continuous Glucose Monitoring (CGM) device in the United States, and a remarkable year of growth and profitability for the company. The latest version of its flagship CGM, the G7, is currently launching in the United States, with launches already underway in key markets outside the country.

The G7 is 60% lighter than its predecessor, the G6 CGM, and has already received overwhelmingly positive user reviews. In fact, 97% of initial users said how easy the G7 is to use. Meanwhile, DexCom has just announced that the G7 will be covered for eligible Medicare beneficiaries, ensuring it is the most covered CGM device on the market today.

2022 has been a successful year for DexCom on a host of fronts. The company grew its user base by 450,000, ending the 12-month period with a total of approximately 1.7 million CGM users worldwide. Revenue and net profit for the 12-month period reached $3 billion and $341 million, respectively, representing increases of 19% and 57% over the prior year.

The CGM market continues to grow as the prevalence of diabetes increases worldwide. And although most CGM wearers are type 1 diabetics, not only is this market still underpenetrated (there are over 8 million people worldwide with type 1 diabetes), but there is a expanding market opportunity for DexCom to reach people with type 2 diabetes, the most common form of the disease, and potentially even prediabetes.

Despite the fact that DexCom remains a global leader in the CGM market, there is enormous room for health care company to grow in the years to come and, in doing so, increase shareholder returns.​​

Rachel Warren holds positions at DexCom. The Motley Fool fills positions and recommends Vertex Pharmaceuticals. The Motley Fool recommends DexCom. The Motley Fool has a disclosure policy.