The slow path to wealth
Investors who are after long-term growth but want downside protection might want to take a close look at CVS Health (NYSE:CVS). CVS' services are likely to be in demand no matter what is going on in the economy, which should gives its stock downside protection.
You're likely familiar with the company's retail pharmacy empire, a network of more than 9,600 stores, mostly in the U.S. With more than 10,000 baby boomers retiring every day, the demand for pharmacy services is bound to steadily increase.
However, you might not know that CVS Health also operates one of the largest pharmacy benefits management businesses in the country. This business line helps providers of healthcare benefits -- such as governments, unions, and employers -- to lower their spending on prescription drugs. For a modest fee, CVS Health uses its massive scale and deep pharmacy knowledge to negotiate favorable drug prices, and the savings are passed on to its customers. This business is in high demand right now, which is evidenced by continued double-digit revenue growth and a customer retention rate of 97.5%.
With both business segments poised for steady growth over the years ahead, CVS Health can easily use its financial might to reward shareholders. The company has a nice history of buying back shares and steadily growing its dividend.
A little more upside, a bit more risk
Investors who are after a stock with more upside potential and are willing to accept a bit more risk might want to consider looking at American Tower (NYSE:AMT).
American Tower is organized as a real estate investment trust, or REIT, and the company specializes in owning and operating cellular towers. American Tower builds or buys cellular towers around the world and then makes money by leasing out space on the towers to local wireless carriers. Wireless providers are happy to sign on as customers since leasing space saves them the headache and expense of finding and operating their own towers.
The massive global growth in smartphone sales has been a boon to American Tower's business. Wireless providers have scrambled to keep up with consumer demand for coverage and data, which drives demand for tower space. Since American Tower isn't competing for wireless customers directly, it's agnostic about which carriers uses which towers, giving it the advantage of being able to lease out space to multiple carriers on the same towers at the same time. That fact allowed the company to drive strong revenue and profit growth over the past decade.
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