It’s hard to beat stocks if you want to build wealth over many years. According to research by Wharton professor Jeremy Siegel, stocks have outperformed bonds, gold and the dollar for more than 200 years.
Bonds were the closest competitor, but stocks also beat bonds over relatively shorter periods of time; during the 75 years between 1946 and 2021, stocks grew an average of 11.3% annually, compared to 5.8% for long-term government bonds. (The long-term average annual return of the S&P500 is around 10%.)
If you’re looking for promising stocks that can help you build wealth in the years to come, here are three to consider. See which ones interest you.
1. Pfizer
Pharmaceutical giant Pfizer (NYSE:PFE) is a well-known name. Not only has it been trading at attractive levels lately, it also currently has a fat dividend yield of 5.8%. (That’s no coincidence, as a falling share price will increase the dividend yield, and vice versa, and Pfizer’s stock was recently down 29% from its 52-week high.)
Pfizer’s first-quarter report reported revenue of $14.9 billion, down about 20% from the year before. But that was largely due to declining sales of the COVID-19 vaccine and the Paxlovid treatment for COVID-19. Excluding this turnover, turnover even increased by 11%.
CEO Albert Bourla cited revenues from several of our recent commercial launches and acquired products, as well as robust year-over-year growth for several key inline brands, namely the Vyndaqel family, Eliquis and the Prevnar family. we had strong oncology revenue contributions from Ibrance, Xtandi, Padcev and Adcetris.”
Pfizer’s recent price-to-sales ratio of 2.9 is below its five-year average of 3.4, indicating an attractively valued stock. Some even consider it “one of the biggest bargains” in the stock market.
2. Veeva Systems
It’s often a smart move to buy a strong-performing company when it’s in a slump, as long as its growth prospects remain solid. That seems appropriate Veeva systems (NYSE: VEEV), a company that primarily serves the life sciences industry with cloud-based services. (For example, it helps pharmaceutical companies manage their clinical trials.) Its numerous customers include Lily, MerckPfizer and Modern.
In the fourth quarter, growth stock Veeva posted 12% year-over-year revenue growth, and subscription services revenue rose 13%. The company also added 44 new customers, bringing the recent total to 1,432. Once a new customer is found, that customer is likely to stick around because after the customer starts using Veeva’s services, switching to another provider can be expensive and inconvenient. (That’s the competitive advantage of ‘switching costs’.)
Veeva’s price-to-sales ratio and forward-looking price-to-earnings (P/E) ratio are both well below their five-year averages, reflecting a significantly lower value than in the recent past. It’s also worth noting that Veeva is one of the relatively few “public companies” that has committed to “balancing the interests of all stakeholders, including customers, employees, shareholders and the industries it serves.”
3. Vanguard S&P 500 ETF
This last “stock” to consider isn’t exactly a stock, at least not in the sense that Pfizer and Veeva Systems are. It’s an exchange-traded fund (ETF) – which is a lot like a mutual fund, but it trades like a stock, allowing you to buy one or more shares through your investment account. Specifically it is the Vanguard S&P 500 ETF (NYSEMKT: VOO).
How can this ETF help you get rich in 2025 and beyond? Because it’s an index ETF, it tracks the S&P 500 index, which is packed with 500 of America’s biggest and best companies, including all the “Magnificent Seven” stocks, many dividend-paying companies, and most of the big companies you’ll find. wish you owned it. Investing in it is like investing in America’s future, and it saves you the trouble or worry of selecting the most promising individual stocks you can find (although you can always do that, too).
The ETF charges a minuscule annual fee of 0.03%, and has returned an average annual gain of 13% over the past decade. The company also recently had a dividend yield of 1.4%.
One or more of these investments can grow your wealth over time. There is no guarantee that they will increase in value this year or next, but they will probably do quite well over many years.
Should you invest €1,000 in Pfizer now?
Consider the following before buying shares in Pfizer:
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Selena Maranjian holds positions at Moderna and Veeva Systems. The Motley Fool holds positions in and recommends Merck, Pfizer, Vanguard S&P 500 ETF, and Veeva Systems. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.
3 Stocks That Can Help You Get Richer in 2025 and Beyond was originally published by The Motley Fool
