3 Stocks to Buy and Hold: The Long-Term Play for Your Portfolio

When building a long-term, buy-and-hold portfolio in the healthcare sector, it is best to avoid biotech stocks, which can be more speculative, in favor of larger, more established healthcare companies with deep structural advantages.

Look for companies with wide economic moats, dependable dividends, reliable cash flows, and strong secular tailwinds from our aging population. Three of the best buy-and-hold healthcare stocks that fit this criteria perfectly are Johnson & Johnson (NYSE: JNJ), Abbott Laboratories (NYSE: ABT), and UnitedHealth Group (NYSE: UNH). Here's why I like each of these stocks.

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Johnson & Johnson is the ultimate set-it-and-forget-it healthcare giant. Since the 2023 spinoff of its consumer health division, now Kenvue, the company's remaining segments, innovative medicine and medtech, have improved the company's margins.

In the first quarter, Johnson & Johnson reported revenue of $24.1 billion, up 9.9%. Its adjusted earnings per share (EPS) of $2.70 topped analysts' expectations of $2.68. Johnson & Johnson upgraded its full-year forecast to say it expects between $99.7 billion and $100.7 billion in yearly sales, up 6.4% at the midpoint, and adjusted EPS of $11.45 to $11.65, up 7.1% at the midpoint.

The company's huge research and development budget yields a steady pipeline of new therapeutics, helping insulate it against the regular patent cliffs that cripple smaller drugmakers. J&J spent more than $3.5 billion in the first quarter on R&D. The company's top launches this year are the plaque psoriasis treatment Icotyde and its integrated cardiac ablation platform, the Thermocool SmartTouch SF catheter.

The company has increased its dividend for 64 consecutive years, including a 3% boost this year, making it a Dividend King, one of the stocks that have increased their dividends for 50 or more years. Backed by a pristine balance sheet with $22.1 billion in cash and marketable securities, its dividend is arguably one of the safest among healthcare stocks.

Abbott is the gold standard for a diversified, multilayered bet on global healthcare demand. It operates across four major pillars: medical devices (including the continuous glucose monitoring system, Freestyle Libre), diagnostics, nutrition, and established pharmaceuticals.

Abbott's geographic and operational diversification protects it against localized regulatory changes or single-product downturns. When one sector faces friction, another typically steps in to pick up the slack. For instance, surging demand for its cardiac and diabetes medical devices has consistently driven robust baseline growth. In the first quarter, while sales for its nutrition segment fell, sales for medical devices, diagnostics, and established pharmaceuticals all increased.

Abbott reported first-quarter sales of $11.2 billion, up 7.8% year over year, and adjusted EPS of $1.15, up 6% from the same period a year ago. It said it expects full-year revenue growth of 6.5% to 7.5% and full-year adjusted EPS of $5.38 to $5.58, up 6.4% at the midpoint, including $0.20 in dilution from its $21 billion acquisition of Exact Sciences. That deal is expected to bolster the company's sales of cancer screening and precision oncology diagnostics.

Abbott is a Dividend King. It has increased its dividend for 54 consecutive years, including a 6.8% raise effective this year, backed by efficient operational cash conversion that allows it to easily fund future organic growth and reward patient investors.

Rather than betting on which manufacturer produces a drug or device, UnitedHealth lets you invest in the company that manages the system's capital flow. As the largest private health insurer in the U.S., it sits squarely at the center of the domestic economy.

UnitedHealth Group's real strength lies in its dual-engine model. Beyond traditional health insurance, its Optum division manages data analytics, pharmacy care, and direct healthcare delivery. By serving its own insurance members through its own Optum clinics and pharmacies, it effectively captures profits on both ends of the healthcare delivery pipeline, a vertical integration advantage.

UnitedHealthcare Group reported first-quarter revenue of $111.7 billion, up 2% year over year, led by its UnitedHealthcare segment at $86.3 billion, up 2% from the first quarter of 2025. EPS was $6.90, up less than 1%, year over year. It said it expects full-year EPS of more than $17.35, up at least by 31%.

UnitedHealth Group generates huge, steady free cash flows, including $8.9 billion in the first quarter, or 1.4 times net income. While it has only raised its dividend for 17 consecutive years, its 2.1% yield is similar to those of Johnson & Johnson and Abbott, and it has boosted its dividend at a higher rate during the past decade.

All three healthcare stocks provide low volatility and a high margin of safety. Their long records of dividend increases show how they have effectively managed high cash flows. Though their revenue growth isn't astronomical, all three companies benefit from built-in diversity, which serves them well, particularly in tough economic times.

The other reason to see these stocks as great buy-and-hold investments is that they consistently develop new revenue streams. Johnson & Johnson and Abbott invest heavily in R&D to develop new products, while UnitedHealth Group benefits from serving as both an insurer and a healthcare provider.

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James Halley has positions in Johnson & Johnson. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool recommends Johnson & Johnson, Kenvue, and UnitedHealth Group. The Motley Fool has a disclosure policy.

3 Stocks to Buy and Hold: The Long-Term Play for Your Portfolio was originally published by The Motley Fool