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

The article identifies AbbVie and Medtronic as strong long-term healthcare investment opportunities, emphasizing the sector's defensive nature. AbbVie is successfully navigating the loss of exclusivity for Humira, driven by robust sales growth from newer immunology drugs Skyrizi and Rinvoq, which contributed to a 6.6% revenue increase in Q2 2025, alongside strategic acquisitions and a consistent dividend record. Medtronic, a diversified medical device company, reported 4.9% organic revenue growth in fiscal 2025 and is strategically spinning off its lower-margin diabetes business to enhance focus on high-growth segments, a move further influenced by activist investor Elliott Management, while also maintaining a nearly 50-year dividend growth streak.

Analysis

The healthcare sector offers defensive stability during economic volatility. AbbVie (ABBV) successfully navigated Humira's loss of exclusivity with robust sales from newer immunology drugs, Skyrizi and Rinvoq. These, alongside neuroscience products, drove a 6.6% year-over-year increase in Q2 2025 net revenue to $15.4 billion, with immunology revenue up 9.5% and neuroscience up 24.2%.

AbbVie's growth trajectory is supported by a patent settlement extending Rinvoq's U.S. exclusivity to 2037 and management's projections of $11 billion and $20 billion in annual revenue for Rinvoq and Skyrizi by 2027. The $1.2 billion bretisilocin acquisition further strengthens its pipeline. AbbVie also maintains Dividend King status, yielding approximately 2.8%.

Medtronic (MDT) reported 4.9% organic revenue growth in fiscal year 2025, with Cardiovascular and Neuroscience segments contributing almost 70% of total revenue. Its BrainSense system received FDA approval, showcasing innovation. A key strategic move is the planned separation of its lower-margin diabetes business, aiming to enhance focus on higher-margin growth drivers.

Activist investor Elliott Investment Management's involvement, leading to new board appointments and committees focused on growth and operational efficiency, signals potential for accelerated value creation at Medtronic. This, combined with its extensive product pipeline and nearly 50-year dividend growth track record (yielding ~3%), positions Medtronic for potential future upside.

Key Decisions for Investors

• Investors should consider AbbVie (ABBV) for long-term defensive growth and income, given its successful new product ramp-up, extended patent exclusivity for key drugs, and robust dividend history.
• Evaluate Medtronic (MDT) for potential value creation driven by its strategic spin-off of the lower-margin diabetes business and the anticipated operational enhancements influenced by activist investor Elliott Management.
• Monitor the execution of Medtronic's new growth and efficiency initiatives, as well as AbbVie's progress on its extensive R&D pipeline and commercial targets for Skyrizi and Rinvoq.