<div id="readability-page-1"><p>If you are in your 20's you likely have more than four decades ahead of you to invest before hitting retirement. Some might suggest that now is the time to take an aggressive investment stance, but that could entail more risk than you think. Make a big bet on the wrong stock and you could turn thousands of dollars into pennies.</p> <p>An alternative path that might make more sense is to find a collection of industry leaders in an inherently growth-oriented industry to invest in. The healthcare industry is a great example, since everyone needs medical care and technological advances drive the sector's growth. And, lucky for you, industry leaders <strong>Medtronic</strong> <span>(MDT<span> -0.71%</span>)</span>, <strong>Johnson &amp; Johnson</strong> <span>(JNJ<span> -0.57%</span>)</span>, and <strong>Merck</strong> <span>(MRK<span> 0.34%</span>)</span> are all attractively priced right now.</p> <p>Here's why younger investors might want to buy all three of these healthcare stocks.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Mjg1OTEvMjFfMTFfMTEtYS1wZXJzb24tcG9pbnRpbmctdG8tYS13cmlzdHdhdGNoLV9nZXR0eWltYWdlcy0xMTc1MjA1OTA0LmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Mjg1OTEvMjFfMTFfMTEtYS1wZXJzb24tcG9pbnRpbmctdG8tYS13cmlzdHdhdGNoLV9nZXR0eWltYWdlcy0xMTc1MjA1OTA0LmpwZyZ3PTcwMA"/></p><p>Image source: Getty Images.</p> </div> <h2>1. Medtronic is taking care of some normal maintenance</h2> <p>Medtronic is one of the largest medical device makers on the planet. It has industry-leading positions in the cardiovascular, neuroscience, medical surgical, and diabetes niches. The company's growth has stalled out. That has left Wall Street downbeat on the shares, which trade down around 30% from their 2021 highs. The dividend yield is near historical highs at around 3%.</p>  <p>Why buy this down-and-out stock? Because Medtronic has a long history of surviving through the hard times that every company eventually has to face. The proof of this is its 48 consecutive years' worth of annual dividend increases. That's an incredible streak that places the company just two years shy of Dividend King status. More important today, however, is that management is taking the steps necessary to improve profitability. That includes cutting costs, investing in new technologies and products, and refocusing its business around its most profitable operations. The next big move is the spin-off of the company's diabetes business, which is set to take place in early 2026.</p> <p>If you don't mind collecting a lofty yield from a company that knows how to survive hard times, Medtronic is a great pick if you are 20 or 65. But if you are 20, you can benefit from decades of business growth and use a dividend reinvestment plan to further compound your returns.</p> <h2>2. Johnson &amp; Johnson will survive the talcum powder mess</h2> <p>Next up on this list is Johnson &amp; Johnson, which is a giant in both the pharmaceutical and medical device spaces. Like Medtronic, it is out of favor with investors. The stock's dividend yield is 3% and toward the high side of the historical yield range. The average pharmaceutical stock has a yield of around 1.4% while the average healthcare stock's yield is roughly 1.8%.</p> <p>The stock price, however, isn't quite as downtrodden as that of Medtronic, with J&amp;J's price down from its all-time high by roughly 5% or so. That said, there is a material overhang here in the form of talcum powder lawsuits that have been filed against J&amp;J. There are billions of dollars at stake, and the company can't fully discuss the issue with shareholders because of the legal nature of the problem. The uncertainty has left J&amp;J shares to languish a bit. But this Dividend King has increased its dividend annually for over six consecutive decades, showing clearly that it knows how to survive hard times.</p>  <p>To be fair, there are also headwinds to deal with in the company's core operations. The list includes patent expirations and the need to keep bringing out new drugs and medical devices. But those are just normal business fluctuations, much like what Medtronic is dealing with. Adding the legal issue probably makes J&amp;J more appropriate for aggressive investors or those who can stick around for a long time. Like investors in their 20's.</p> <h2>3. Merck has a patent cliff coming up</h2> <p>Medtronic is focused on medical devices. Johnson &amp; Johnson's specialties are medical devices and drugs. Merck is just drugs. And while it doesn't have as long a history of annual dividend increases, at just 15 years, Merck's dividend has trended generally higher for decades. It doesn't exactly stand toe to toe with Medtronic and J&amp;J on the dividend front, but it is still a reliable business that has proven it can muddle through hard times.</p> <p>It is facing a hard time right now. First, there's a rather negative view of healthcare companies in the market related to political and social issues involving the current administration. Given the importance of healthcare in general, and drugs in particular, this will likely pass. The second problem for Merck is that its growth is heavily influenced by one oncology drug -- Keytruda. In a few years, however, this drug will lose patent protections and Merck will need to have other drugs lined up to make up for the revenue that generic drugs tend to steal away. Merck's pipeline looks a bit weak, so investors are worried it won't be ready for the approaching patent cliff.</p>  <p>That's not unreasonable, but Merck has world-class R&amp;D teams, and it is large enough to buy smaller competitors with attractive products (if it needs to). It is highly likely that it figures out how to deal with the patent issue, like it has many times before. Still, investors are downbeat at the moment, and the stock is off its 2024 highs by nearly 40% and the dividend yield is a historically high 4% or so. If you have the benefit of time, you can buy now and comfortably wait for better days.</p> <h2>The key to the healthcare story</h2> <p>There are two broad ways to play the healthcare sector. You can swing for the fences and buy small upstarts with novel products, hoping that the companies you pick are the ones that end up winning in the market. Or you can buy industry leaders that have proven time and again that they have the wherewithal to survive and thrive over the long term, often buying up the upstarts to benefit from their novel products.</p> <p>Most investors will be better off focusing on the industry leaders. And, often, the best time to buy industry leaders is when investors are downbeat on their prospects. Which is exactly the case today with industry giants Medtronic, Johnson &amp; Johnson, and Merck. If you buy in while you are in your 20s and hold until you retire (hopefully reinvesting dividends all along the way), history suggests you will end up a very happy shareholder.</p>                                                                            </div>

<p>The article suggests that young investors in their 20s should consider buying three healthcare stocks: Medtronic, Johnson & Johnson, and Merck. Medtronic, despite recent struggles, offers a strong dividend yield and is refocusing on profitability. Johnson & Johnson, while facing legal challenges, has a long history of dividend increases. Merck, primarily a drug company, is also reliable but faces growth challenges due to dependence on a single drug. Overall, these stocks are positioned well for long-term growth in the healthcare sector.</p>

If You're In Your 20's, Consider Buying These 3 Healthcare Stocks