2 No-Brainer Healthcare Stocks to Buy With $200 Right Now

Are there misconceptions about investing? You bet there are. One of the biggest, in my opinion, is that you need a lot of money to get started. That's not true at all.

You can find plenty of affordable stocks that offer solid long-term growth prospects. If you're interested in the healthcare sector, it's an especially easy task. Here are two no-brainer healthcare stocks to buy with $200 right now.

Pfizer: A better story than meets the eye

I can imagine some eyes might be rolling seeing Pfizer (NYSE: PFE) listed. The pharma stock has plunged over 50% from its peak and is barely in positive territory in 2024. Pfizer faces several challenges, including sinking COVID-19 vaccine sales and the looming patent expirations for several top products. However, I think there's a better story with Pfizer than meets the eye.

First, Pfizer is cheap. I'm not just talking about the drugmaker's share price of under $30. The stock trades at a forward price-to-earnings ratio of 10.2. The forward earnings multiple for the S&P 500 healthcare sector is 18.5.

Income investors should love Pfizer's forward dividend yield of 5.75%. I think other investors should like this juicy yield too, because it gives Pfizer a big advantage in delivering exceptional total returns.

Pfizer's growth outlook should improve significantly in the coming years, too. I don't expect the company's COVID-19 vaccine sales to ever return to their lofty levels of 2021 and 2022. And Pfizer won't be able to escape the negative impact of its patent cliff. However, the company's acquisitions in recent years and pipeline development should pay off.

One good example of the former is Pfizer's 2022 acquisition of Biohaven Pharmaceuticals. This deal added migraine drug Nurtec to Pfizer's lineup. In the second quarter of 2024, sales for Nurtec soared 44% year over year.

An example of the latter is Pfizer's investment in developing respiratory syncytial virus (RSV) vaccine Abrysvo. Management expects the vaccine to generate peak annual sales of over $2 billion.

Activist investor Starboard Value, which recently invested close to $1 billion in Pfizer, might not agree with this bullish take. However, I see Starboard's involvement in Pfizer as a positive, especially with the company reportedly enlisting former Pfizer CEO Ian Read and former CFO Frank D'Amelio in its efforts.

TransMedics Group: An organic growth machine in more ways than one

TransMedics Group (NASDAQ: TMDX) is in a much different place than Pfizer. This up-and-coming company is turning the organ transplant market upside down with its Organ Care System (OCS), which keeps donor livers, hearts, and lungs functioning until they can make it to their intended recipients.

Business is booming for TransMedics. In Q2, revenue soared 118% year over year to $114.3 million. The company reported another profitable quarter with earnings of $12.2 million compared to a net loss of $1 million in the prior-year period.

Cold storage has been the standard for transporting donor organs in the past. However, far too many organs didn't make it to recipients in an acceptable condition to be used. This massive underutilization of donor organs presents a big opportunity for TransMedics.

There's even more good news, though. OCS dramatically reduces the number of severe post-transplant complications with organ transplants -- 50% for lungs, 65% for hearts, and 43% for livers.

TransMedics is also addressing another major obstacle for organ transplants: the lack of availability of aircraft to transport donor organs. The company acquired private charter operator Summit Aviation last year to establish the first air logistics provider in the U.S. dedicated exclusively to organ transplantation.

I expect TransMedics' growing fleet of aircraft will enable it to expand the U.S. organ transplant market. The company is also pursuing reimbursement coverage for OCS in key European markets. With a share price of around $135, investors can afford to buy TransMedics and Pfizer with $200 and have money left over.

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See 3 “Double Down” stocks »

*Stock Advisor returns as of October 7, 2024

Keith Speights has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer and TransMedics Group. The Motley Fool has a disclosure policy.