Although the stock market whipsawed investors over the past few years, it showed its resilience by bouncing sharply higher after the pandemic collapse. As it has for more than a century, every double-digit decline by stocks is followed by a bull market. This has paved the way for several stocks with massive potential to explode.
Betting on the market to always bounce back stronger is a smart investment strategy. Where bear markets tend to be measured in months, bull markets go on for years. That kind of hardiness is evident in numerous individual companies too. Confronted with adversity, they persevere and go on to handsomely reward patient investors.
What follows are three resilient stocks that possess the potential to make you incredibly rich in the years to come.
Bristol-Myers Squibb (BMY)
Pharmaceutical stock Bristol-Myers Squibb (NYSE:BMY) is down 40% from its 52-week high. Investors who understand this is only a temporary setback will be handsomely rewarded down the road.
The pharma lost most of its patent protections on top-selling cancer drug Revlimid in March 2022. Generic drugmaker Teva Pharmaceuticals (NYSE:TEVA) launched a low-cost version immediately afterwards and others followed suit. Annual revlimid sales totaled $12.8 billion in 2021 but fell to $10 billion in 2022. Sales are down 40% year to date to $4.6 billion but almost 50% below what they were two years ago. The same happened with Bristol’s chemotherapy drug Abraxane.
It’s part of the cycle of investing in pharmaceuticals. It’s why they continuously develop new therapies, extend indications for existing drugs, make acquisitions, and have a pipeline of other drugs to take over. Bristol-Myers Squibb has that in spades.
Eliquis is a blood thinner with sales of $9.3 billion in 2023, up 2.5% year over year. Opdivo is another cancer treatment with $6.6 billion in sales this year, 10% more than last year. It has five other multi-billion treatments as well, plus numerous others that will earn more than $1 billion this year. Bristol-Myers Squibb is also acquiring Mirati Therapeutics (NASDAQ:MRTX) for $5.8 billion that will bring additional cancer therapies into the fold. And Revlimid itself is still a multi-billion drug in its own right. It still has certain other patents that don’t expire until March 2026.
At six times projected earnings and eight times free cash flow (FCF), the pharmaceutical stock is a bargain, one that will bounce back soon for investors with foresight.
HP (HPQ)
Computer and printer maker HP(NYSE:HPQ) is holding up better than some this year, though shares are down 15% from recent highs. However, they are up 6% year to date after rebounding from a disappointing third-quarter earnings report. A good argument can be made they’ll continue their current trajectory higher.
HP is hitching its cart to artificial intelligence (AI). the tech stock produced the first workstation dedication to Nvidia‘s (NASDAQ:NVDA) enterprise AI software and it’s looking to release an AI personal computer (PC) in 2024. It could be what ignites a renaissance in PC sales.
It’s no secret PC sales are in a secular decline. International Data Corporation (IDC) forecasts PC sales will fall another 14% this year to 252 million units on top of a 16% decline last year. That was the worst annual drop since IDC began tracking them. PC sales reached their peak in 2011 when 365 million units sold, but have fallen ever since. HP thinks AI can change all that.
CEO Enrique Lores told analysts “The emergence of the AI PC in 2024 will start a new cycle of market expansion and refresh.” IDC concurs. It says enterprise customers are discussing their next purchases in terms of AI capabilities.
Meanwhile, HP goes for seven times next year’s earnings and less than 10 times FCF suggesting the computing giant will prove its resiliency for investors who buy in now.
Realty Income (O)
Real estate investment trust (REIT) Realty Income (NYSE:O) is the third solid stock that will inject massive wealth into your portfolio.
Realty Income invests in commercial properties even as 11 interest rate hikes in 18 months by the Federal Reserve rocked the commerical real estate market. However, the collapse of several banks earlier this year also made getting credit more difficult as lenders grew cautious. It’s partly why the stock fell 35% from recent highs. Yet translating those concerns to Realty Income was premature.
The REIT only rents out to strong, established retailers. Only 10% of its tenants are industrial clients. Walmart (NYSE:WMT), Walgreens (NASDAQ:WBA), and convenience store chain 7-Eleven are among its top-tier tenants. That means Realty Income doesn’t have to worry about collecting rent or having vacancies. At the end of September, occupancy rates stood at 98.8% on its properties.
Even better for investors is Realty Income’s track record in paying dividends. The REIT bills itself as “The Monthly Dividend Company.” It has made 640 consecutive monthly payments and raised the payout for 104 consecutive quarters. The dividend yields a healthy 5.7% annually. Shares are up 18% from their low point at the end of October. With the Fed pausing their rate hike policies, Realty Income stock should start is comeback. The REIT exhibits all the hallmarks of a stock that holds massive potential for making investors rich.
On the date of publication, Rich Duprey held a LONG position in O and WBA stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
