2 Healthcare Stocks for Individual Investors With a 10-Year Time Horizon

AbbVie is successfully navigating Humira's patent expiry, driven by robust Q2 2025 growth in its immunology (Skyrizi, Rinvoq) and neuroscience portfolios, with key products projected for significant future revenue and Rinvoq's patent extended to 2037. Concurrently, Medtronic is strategically repositioning by spinning off its lower-margin diabetes business to focus on high-growth medical device segments, a move reinforced by activist investor Elliott Management's significant stake and subsequent board changes aimed at improving growth and efficiency. Both companies offer durable investment prospects within the defensive healthcare sector, supported by consistent dividend growth.

Analysis

AbbVie (ABBV) successfully navigated Humira's exclusivity loss, reporting Q2 2025 worldwide net revenue growth of 6.6% to $15.4 billion, driven by robust immunology and neuroscience portfolio performance. Key drugs Skyrizi and Rinvoq are projected for significant future revenue, with Rinvoq's patent extended to 2037, ensuring a durable growth runway. The $1.2 billion bretisilocin acquisition further expands its pipeline, complementing its Dividend King status and 2.8% yield.

Medtronic (MDT) is strategically repositioning its medical device portfolio, achieving 4.9% organic revenue growth in FY2025, primarily from high-margin Cardiovascular and Neuroscience segments. The planned spin-off of its lower-margin diabetes business aims to enhance focus on core growth drivers and operational efficiency, supported by recent FDA approvals.

Activist investor Elliott Investment Management's significant stake has prompted board changes and new committees, signaling a proactive drive for improved performance. Medtronic's nearly 50-year dividend growth track record, yielding about 3%, further solidifies its appeal for long-term investors within the defensive healthcare sector.

Key Decisions for Investors

• Investors should consider AbbVie for long-term growth and stable income, given its successful pipeline diversification, strong revenue projections for key immunology drugs, and consistent dividend growth.
• Evaluate Medtronic's strategic pivot, particularly the diabetes business spin-off and the impact of activist investor involvement, as these initiatives are likely to enhance focus on higher-margin segments and operational efficiency.
• Monitor both companies' R&D pipelines and regulatory approvals, as continued innovation and market expansion are critical drivers for sustained performance in the defensive healthcare sector.