Regardless of short-term market machinations, investing in quality businesses with a long-term mindset can help you grow a profitable portfolio. Whether you prefer growth-oriented businesses, value stocks, income stocks, or a combination of the above, diversifying your portfolio across stocks and sectors can help you enjoy the best of all worlds as you work toward your long-term investment goals.
Of course, investing does require that you have something to invest. But it doesn't take much at the start to get your inventing journey going. Nor does it take much to keep it going. Even a $500 investment can lead to significant returns, if you make the right investment choices.
If you're looking for two magnificent growth stocks to start your long-term portfolio (or add to a portfolio) and have $500 available to invest, these two businesses are great ones to consider and potentially purchase.
1. Eli Lilly
Eli Lilly (LLY -1.38%) has been on a growth streak lately thanks to enthusiasm regarding its GLP-1 drugs, as well as the continued expansion of its market-leading portfolio of medicines. Share prices are up about 57% over the past year.
The market's enthusiasm is also related to Eli Lilly's revenue soaring 36% year over year to $11.3 billion, fueled by the success of numerous portfolio stars including GLP-1 drugs Mounjaro and Zepbound, as well as cancer drug Verzenio. The three drugs alone brought in roughly half of the quarter's revenue ($5.7 billion). A lot of that revenue is making its way to the bottom line. Eli Lilly reported net income of nearly $3 billion in the quarter, a 68% increase from one year ago.
The recent approval of Kisunla is another potential tailwind for Eli Lilly. The drug is a potentially revolutionary monoclonal antibody medication designed to treat early symptomatic Alzheimer's disease. In the phase 3 study of Kisunla, the drug slowed cognitive and functional decline by up to 35% after 18 months use compared to a placebo. It also slashed participants' risk of progressing to the next clinical stage of the disease by up to 39%.
Eli Lilly continues to garner worldwide approvals for Jaypirca, recently getting regulatory approval in Japan. This is less than a year after the drug received accelerated approval from the U.S. Food and Drug Administration to treat adults with chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL) who have received at least two prior lines of therapy, and roughly a year and a half after its initial accelerated approval to treat adults who have relapsed or refractory mantle cell lymphoma. Jaypirca belongs to a class of drugs known as Bruton tyrosine kinase (BTK) inhibitors, and analyst estimates from GlobaData show that Jaypirca could dominate 60% of the BTK leukemia market by the early 2030s.
Beyond share price gains, Eli Lilly also rewards investors through consistent dividend payments. The company has increased its payout annually for 10 consecutive years. The company has actually paid a dividend in some form since 1885. The dividend yield is below average at the moment, yielding less than 1%, but that is partially attributable to the rapid rise in the share price this year. For investors looking for a no-brainer healthcare stock to buy and hold for the long run, Eli Lilly looks like a wise addition to a well-rounded portfolio.
2. Chipotle Mexican Grill
Chipotle Mexican Grill (CMG -1.12%) has been managing several changes in 2024. Its CEO Brian Niccol left in August to take the top job at Starbucks, and the company enacted a major 50-for-1 stock split in June, making shares far more accessible to a broader group of investors. Despite the changes, the stock still trades up by roughly 27% from the start of this year.
While some investors may have been uneasy about the departure of Niccol, such changes are relatively common in the growth stories of large companies. Chief Operating Officer Scott Boatwright is serving as Interim CEO and Chipotle's Board of Directors is carefully evaluating who will take over the role permanently. While this is certainly an important element investors should be watching, the company remains in great shape from a financial perspective.
Consumers continue to spend their money at more than 3,400 Chipotle restaurants despite shifting spending patterns and tightening wallets due to ongoing macroeconomic volatility. In the second quarter of 2024, Chipotle reported revenue of $3 billion, up 18% from one year ago, while comparable restaurant sales rose 11% year over year. both figures are enviably high in a fickle restaurant industry known for changing loyalties among customers.
The company generated a stellar operating margin of 19.7% while the restaurant-level operating margin of 28.9% jumped 140 basis points year over year. Chipotle's bottom line gains were even more impressive, with net income soaring 33% to approximately $456 million. The restaurant chain also opened 53 new restaurants in the quarter, with most of them including the very successful Chipotlane drive-thru option. There's still plenty for investors to like about this stock, and even a modest position of $500 could pay off over the long run.
