While 2022 just started, it has been action packed to say the least. We’re out here looking for bear market stocks to buy amidst all that’s happening.

First, the tech market fell off, and other prominent indexes followed suit. Then inflation reached a 40-year high. Finally, Russian President Vladimir Putin ordered his military to invade Ukraine, resulting in a humanitarian crisis and increasing gasoline costs.

Many gloomy headlines and market volatility have resulted from this. The tide, though, may be changing. Moreover, long-term investors don’t need to respond to current events. Some firms are winners no matter what, and they should be cornerstones of long-term portfolios. Let’s take a look at some examples of great bear market stock buys.

AbbVie

“Hair grows even in a recession,” according to the saying. It is the same for prescription drugs. AbbVie (NYSE:ABBV) is unlikely to suffer a substantial sales decline during an economic downturn because its products are necessary for the most part.

Dividend stock

Investors can also use a steady, growing dividend to unwind when the market is turbulent. AbbVie currently pays shareholders $1.41 per quarter quarterly. That translates to an annual dividend yield of around 3.5%. Since the firm’s inception in 2013, the dividend has increased annually. Investors who buy and hold will see their profit improve if they receive a rising dividend.

An investor who invested in AbbVie stock three years ago would have paid approximately $81 per share and now has an effective annual yield of almost 7% and a pot of capital gains. In addition, investors can expect a dividend increase. In 2021, AbbVie paid out $9.3 billion in dividends, but it generated over $22.7 billion in operating cash.

Decreasing Humira reliance

Management has done an outstanding job, from relying on Humira to preparing for the future. In the United States, biosimilars will soon compete with Humira. That will undoubtedly reduce revenue significantly. However, by 2025, its new medicines like Skyrizi and Rinvoq will likely generate $15 billion in sales, making up for much of the lost Humira income.

AbbVie’s total sales are increasing, and the reliance on Humira is decreasing. So that’s an excellent indicator of what’s to come.

Intuitive Surgical

Robotic-assisted, minimally invasive surgery is no longer the stuff of fiction. It is now quite popular across the world. Some reality television shows feature the da Vinci Surgical System from Intuitive Surgical (NASDAQ:ISRG) to perform bariatric operations on high-risk patients. As of the end of 2021, there were 6,730 systems worldwide. According to one estimate, Intuitive has a nearly 80% share in the market. Some analysts and investors have labeled the firm “overvalued,” but they may be missing long-term trends.

Excellent balance sheet

First and foremost, Intuitive Surgical is in excellent financial health. By the end of 2021, the firm had over $8.6 billion in cash and investments on the balance sheet, with no long-term debt. That is a substantial 8.3% of today’s market capitalization, or $1.75 billion more than after 2020. Who wouldn’t want to invest in a firm that generates this much free cash? Intuitive also has an operating margin of 32%, which puts it head and shoulders above competitors in the medical device industry, as shown below.

Finally, Intuitive makes money in a variety of ways. If this were the case, market saturation would be a significant issue. Instead, most purchases are made regularly, such as components and instruments. Repeated sales accounted for 70% of revenue in 2021. Given the significant switching costs involved with surgical systems, it’s an attractive bet that this income will continue to flow.

Post-COVID surge

The passage of COVID-19 had a suppressing influence on recent growth, as hospitals were unable to perform some elective operations. However, now that the worst of COVID-19 has passed, growth may resume.

O’Reilly Automotive

The cost of new and pre-owned automobiles has risen dramatically. The semiconductor scarcity is essentially to blame for this, as it has reduced supply in the new automobile market. As a result, many individuals will attempt to keep their current cars for as long as possible.

O’Reilly Automotive (NASDAQ:ORLY) could benefit from this. The company’s sales come from both do-it-yourselfers (60%) and professional service providers (40%).

The firm stated that comparable shop sales increased 13% in 2021 and 14.5% year over year during the fourth quarter. In 2021, gross profit grew by more than 15%, while diluted earnings per share rose by 32%.

Buyback program

Its extensive share buyback program aids O’Reilly’s considerable EPS growth. In 2021, the firm returned $2.48 billion to shareholders or 5% of the current market capitalization.

O’Reilly stock has gained more than 36% over the last year, and the P/E ratio is just over 22, which is in its recent normal range. So look for this company to capitalize on the robust market demand.

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