If you're excited about the possibilities that the new bull market could present, you're not alone. While bear markets tend to occur every several years, on average, bull markets generally happen more often and last longer.
The stock market is cyclical, and if you're going to invest in stocks for any meaningful duration, you will likely experience that reality multiple times. However, if you're investing both when stocks are up and down, you won't be trying to time the highs and lows of the market and can instead ensure that you're consistently adding cash to wonderful businesses.
If you're looking for revolutionary businesses to add to your portfolio, here are two no-brainer stocks you may want to scoop up in the near future.
1. UnitedHealth Group
UnitedHealth Group (UNH 2.85%) is one of those businesses in the healthcare industry that continues to deliver consistently solid results in a wide range of market environments. Through its insurance arm, UnitedHealthcare, the company offers a wide variety of plans to employers, individuals, Medicare beneficiaries, and more.
Its Optum business features an array of services and solutions that cover the full spectrum of healthcare needs faced by both providers as well as patients. The Optum side includes software and analytics services for providers, life sciences companies, government organizations, and other clients; direct healthcare services including both virtual and in-person care across primary, surgical, urgent, and other specialties; pharmacy care services; and health financial services.
This is an extremely well-diversified business with an extensive footprint in some of those lucrative sectors of the healthcare space. Despite a cyberattack that meant many of UnitedHealth's clients couldn't access reimbursement services and other solutions temporarily, resulting in a subsequent hit to earnings and cash, the company still delivered impressive results on the top and bottom lines in the most recent quarter.
UnitedHealth Group's overall earnings from operations for the quarter totaled around $8 billion on revenue of just under $100 billion. That revenue figure was up about 9% from one year ago. Broken down by segment, UnitedHealthcare delivered revenue of $75 billion, up 7% from one year ago, while Optum generated revenue of $61 billion, up 13% year over year.
This is a cash machine. Trailing-12-month cash from operations for UnitedHealth totals $14 billion at the time of this writing. The company is also a dividend payer, with a yield that is right in line with the average stock on the S&P 500, at around 1.5%.
That dividend has risen more than 70% over the last five years alone. Long-term, buy-and-hold investors looking for steady growth and additional passive income to boot might want to add a position in this top healthcare stock to their to-do list.
2. Lululemon
Lululemon Athletica (LULU 3.00%) is one of those companies that is in enviable financial shape but was stricken recently by the ire of investors. Shares are down around 30% from the start of this year.
That is despite an excellent year of growth in the company's fiscal 2023. Lululemon is consistently profitable, growing revenue steadily, and its cash position looks great. As always, you have to look beyond the stock price at the underlying business.
In 2023, Lululemon's net revenue came to just shy of $10 billion, a 20% increase from 2022. This was driven by a 54% increase on the international side and a 12% increase in the Americas. The company looks well on its way to achieving its "Power of Three x2" growth plan, which includes the goal to double its 2021 net revenue ($6.3 billion) to $12.5 billion by the year 2026.
The company reported a gross margin of 58% for the year, a 290 basis-point increase from 2022. Also noteworthy was the fact that Lululemon's net income increased by an eye-popping 81% from 2022, coming in at around $1.6 billion. The company has raked in operating cash flow of about $2.3 billion in the trailing 12 months alone.
One of the most likely reasons that the stock is trading down right now is because investors are worried about the trajectory of consumer spending in the immediate future. It's true that discretionary spending has been in flux, and consumers have shifted to spending more on experiences than things compared to early pandemic days.
Still, the athleisure space remains a popular spending category for consumers and a market in which Lululemon has maintained a dominant presence. A number of Wall Street analysts think the stock could realize a hefty upside over the next 12 months, from 43% on the median end up to 60% on the high end. For those with a well-diversified portfolio who can stomach some near-term volatility, this quality business still looks well worth the investment.
