The Best Stocks to Invest $500 in Right Now

Some investors are avoiding the healthcare sector right now due to its lagging the market in recent years and its somewhat uncertain outlook. However, this bearish sentiment could mean there are attractive opportunities to buy shares of top healthcare stocks on the dip. Here are two of my favorite picks: AbbVie (NYSE: ABBV) and Vertex Pharmaceuticals (NASDAQ: VRTX). These two not only have outstanding businesses but have also moved in the wrong direction this year despite solid prospects, making them excellent stocks to buy right now with $500 (make sure it's not saved for emergencies). Read on to find out more.

Image source: Getty Images.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

1. AbbVie

AbbVie's stock is down 6% this year, but there isn't too much wrong with the company. True, its aesthetic portfolio -- that features Botox Cosmetics -- isn't performing well. Sales from this division dropped 7.6% year over year to $1.2 billion in the first quarter. However, AbbVie's main growth pillars, the immunology duo of Skyrizi and Rinvoq, are still beating expectations and driving stronger revenue and earnings growth than even management expected.

Further, AbbVie has a deep pipeline and should add several important medicines to its portfolio over the next five years. Let's consider two of the company's most attractive candidates. One of them is Tavapadon, an investigational drug for Parkinson's disease. AbbVie submitted a regulatory application for this therapy in September, so it could receive approval and hit the market soon. Tavapadon could exceed $1 billion in annual sales, according to some estimates.

An even more promising medicine in AbbVie's pipeline is ABBV-295, an investigational weight loss therapy. The market for chronic weight management drugs is growing fast, and ABBV-295 has already posted highly promising results in a phase 1 clinical trial. It could notably offer both weekly and monthly dosing regimens, potentially differentiating it from some of the current leaders in this space.

ABBV-295 still has a long way to go before earning approval (if it gets that far). But the main point is that AbbVie has plenty of brand-new candidates across all clinical trial stages and should significantly rejuvenate its lineup by the end of the decade, while still relying on Skyrizi and Rinvoq to drive top and bottom-line growth.

That's why AbbVie is such a great stock to buy while it's down, and we haven't even considered the dividend. The company is a Dividend King, meaning it has at least 50 consecutive years of annual dividend increases. AbbVie remains a terrific stock for long-term dividend seekers despite some near-term headwinds. And with $500, investors can buy two of the company's shares.

2. Vertex Pharmaceuticals

Vertex Pharmaceuticals is struggling a bit. The company's core franchise of medicines that treat the underlying causes of cystic fibrosis (CF) isn't the growth driver it once was. Meanwhile, the biotech has struggled to diversify its lineup. The stock is down 5% to date. But Vertex still looks likely to perform well over the long run. The company's CF business, where it has a monopoly, can sustain consistent revenue and earnings for about another decade before its most important medicines face patent cliffs.

The drugmaker should also succeed in launching new blockbusters, or medicines that generate over $1 billion in annual revenue. In fact, Vertex Pharmaceuticals has already made tremendous progress in that regard. The company expects at least $500 million in combined revenue this year from its newest non-CF launches, the pain medicine Journavx and the gene-editing therapy Casgevy, which treats two rare blood disorders.

Further, with a potential label expansion for Casgevy in patients between the ages of five and 11 on the horizon, the medicine's sales should get a nice boost. Meanwhile, Vertex Pharmaceuticals is also making clinical progress. The company recently completed an application for accelerated approval for povetacicept, an investigational medicine for IgA nephropathy (a kidney disease). It could earn the green light by November.

Povetacicept could become a meaningful growth driver as it earns label expansions across several indications. Vertex Pharmaceuticals has other promising candidates as well. The company remains well-positioned to deliver market-beating returns over the next decade, making it a top stock to buy right now while it lags broader equities. Investors can buy one share of Vertex for $500.

Prosper Junior Bakiny has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends AbbVie and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.