health care stocks: Best Healthcare Stocks Medical Stocks To Invest In

According to the Centers for Medicare and Medicaid Services, health care spending accounted for 18.3% of U.S. gross domestic product in 2021, the latest year for which data is available, and it’s expected to reach an even higher percentage by 2030. She expects Humana revenues to grow around 10% compounded annually through 2027, earnings per share to increase 13% compounded annually and free cash flow to rise to $6 billion in the same timeframe. The drugmaker boasts solid financial performance, with steadily increasing revenue and profitability. Revenue has risen from $46.8 billion in 2019 to $59 billion in 2022. Net income has similarly risen, from $9.8 billion ($3.81 per share) in 2019 to $14.5 billion ($5.71 per share) in 2022. Free cash flow came to $14.7 billion in the trailing 12 months, 59% higher than 2021 and up 163% from 2020.

Headquartered in New York City, Pfizer is a pharmaceuticals giant that makes medicines, vaccines and some consumer healthcare products. Pfizer has operations in more than 50 countries around the world—in 2020, only about half of its revenue came from the United States. UnitedHealth Group is the biggest publicly traded health insurance company in the U.S. by market capitalization. Through its network of companies, UnitedHealth offers numerous health insurance plans as well as owns Optum, which provides, among other things, healthcare benefits like health savings accounts .

The Other segment focuses on global commercialization services and animal health, and includes AmerisourceBergen Consulting Services ABCS, World Courier, and MWI. The company was founded by in Emil P. Martini in 1947 and is headquartered in Conshohocken, PA. Stryker Corp. is a medical technology company, which engages in the provision of innovative products and services that help improve patient and healthcare outcomes. It operates under the MedSurg and Neurotechnology, and Orthopaedics and Spine segments.

Venture capital is money, technical, or managerial expertise provided by investors to startup firms with long-term growth potential. Some of the more popular healthcare wearable devices are smart health watches, electrocardiogram monitors, blood pressure monitors, and biosensors. A survey conducted by Insider Intelligence found U.S. consumers’ use of healthcare wearables increased to 33% from 9% in the past four years and will continue to grow as new health-tracking technologies emerge. Investing in Biotech Stocks in 2023 These companies create drugs and treatments for some of the biggest medical problems of our time. Novocure markets a novel therapy for treating cancer called Tumor Treating Fields .

Its products include Dexcom G6 CGM System, DexCom G6 CGM System for Medicare, Software and Mobile apps. The company was founded by John F. Burd on May 1, 1999 and is headquartered in San Diego, CA. Eli Lilly & Co. engages in the discovery, development, manufacture, and sale of pharmaceutical products. The firm’s products consist of diabetes, oncology, immunology, neuroscience, and other products and therapies. The company was founded by Eli Lilly in May 1876 and is headquartered in Indianapolis, IN.

#34 – Edwards Lifesciences

For example, biopharmaceutical companies, medical device makers, and healthcare providers can be sued if patients think the companies’ products and services have caused them harm. The company was founded by Dr. Thomas F. Frist, Jr in 1968 and is headquartered in Nashville, TN. Novo Nordisk A/S is a global healthcare company, which engages in the the discovery, development, manufacturing and marketing of pharmaceutical products. It operates through the Diabetes and Obesity Care, and Biopharm segments. The Diabetes and Obesity Care segment includes insulin, GLP-1 and related delivery systems, oral antidiabetic products , obesity, and other serious chronic diseases.

Revenue rose from $2.2 billion in 2019 to $5.2 billion in 2022, while net income of $114 million ($2.40 per share) rose to $444.1 million ($9.90 per share) in the same timeframe. Morningstar analyst Debbie Wang said AMN’s ability to provide “almost any type of medical worker” appeals to its customers as they can use one vendor for all their medical hiring needs. “These managed services relationships have been a major focus for AMN Healthcare, and the firm has become one of the premier HR managed services providers as a result.”

This happens mainly in optic nerves connecting the eye retina to the brain and spinal cord, according to the Mayo Clinic. The stock has performed solidly against the industry, with a five-year total return of 17.3% versus 13.1% for the industry and 9.4% for the Morningstar U.S. Market TR USD Index, a diversified broad-market index. The higher the ratio, the more ably a company can meet its debt payments, dividend payouts and other obligations.

This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Beyond Covid, the mRNA technology has the potential to revolutionize the drug development process. The company also consistently increased its free cash flow, from $12.8 billion in 2019 to $24.3 billion in 2022. AbbVie’s acquisition of Allergan in 2020 further diversifies its business.

What Kinds of Companies Are Healthcare Stocks?

The firm operates through the Sleep and Respiratory Care and Software as a Service segments. The Sleep and Respiratory Care segment engages in the sleep and respiratory disorders sector of the medical device industry. The Software as a Service segment provides business management software as a service to out-of-hospital health providers. The company was founded by Peter C. Farrell in June 1989 and is headquartered in San Diego, CA. The CenterWell segment represents payor-agnostic healthcare services offerings, including pharmacy dispensing services, provider services, and home services.

His focus is on breaking down complex financial topics so readers can make informed decisions. He has been featured by CNBC, Fox Business, Bloomberg, and MarketWatch. Merck was nationalized during World War I under the Trading with the Enemy Act of 1917—being an offshoot of a German company. However, the firm was bought back at government auction in 1919 for $3.5 million by George Merck, a member of the Merck family, with help from Goldman Sachs and Lehman Brothers. UnitedHealth – Strong Buy, based on 11 analyst ratings, 9 Buy, 2 Hold, and 0 Sell. CVS Health – Strong Buy, based on 9 analyst ratings, 9 Buy, 0 Hold, and 0 Sell.

Retirement investors can buy healthcare stocks in tax-advantaged retirement plans, like individual retirement accounts . But if you have a 401, you’ll likely instead have to look into mutual funds that focus on the healthcare industry, rather than individual stocks. Health care has been known as one of the best defensive sectors because they have typically been unchanged due to economic demands. Many health care stocks offer investors stability and profitability in both good times and bad. But the sector is not without risks — particularly when the government is involved. In addition to being one of the best healthcare stocks, AbbVie is also one of the best dividend stocks to own.

Intuitive Surgical is a great example of a medical device stock that also falls into the category of surgical stocks. The company’s Da Vinci robotic surgical system has been used in more than 10 million procedures since its 1999 introduction. The COVID-19 pandemic hurt the company’s business since many elective surgeries were postponed. It also caused a challenging supply chain environment for Intuitive and its customers.

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But in an investing context, “biotech” and “pharma” are used more or less interchangeably. Its most popular drug is Humira, used to treat rheumatoid arthritis and approved also for psoriasis and Crohn’s disease. The top healthcare stock earned 4 out of 5 stars from the analyst, with a fair value of $550. Moreover, HUM usually comes in first or second in Medicare Advantage plans in the counties where it operates, with market share closer to 30% and above in those core local markets, she added. Currently, healthcare is an “inexpensive, defensive sector” whose secular growth is the second fastest since 1986, according to a recent report from BofA Global Research. The sector has “strong fundamentals” and corporate ESG focus could drive additional healthcare spending, the report said.

The company primarily focuses on developing drugs that treat the underlying cause of cystic fibrosis , a rare genetic disease that damages lungs and other organs. Vertex’s newest CF drug, Trikafta, could boost the number of patients its drugs can treat by more than 50%. The company is also developing drugs targeting other rare genetic diseases, as well as more common diseases, including type 1 diabetes. These include companies that design and manufacture medical tests, instruments and equipment, many of which are used in medical research and development processes, including by pharmaceutical companies.

Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. The top healthcare stock has a history of rising revenues as well as profits, with the exception of pandemic-affected 2020.

The firm’s products include instruments, kits and reagents, selection tools, and software and analysis. Its services include sequencing and microarray services, proactive instrument monitoring, and instrument services, training, and consulting. The company was founded by David R. Walt, John R. Stuelpnagel, Anthony W. Czarnik, Lawrence A. Bock, and Mark S. Chee in April 1998 and is headquartered in San Diego, CA. This healthcare industry consists of companies that offer health insurance plans to meet the cost of healthcare for employers and individual consumers. It engages in the discovery, development, manufacture, marketing, sales and distribution of biopharmaceutical products worldwide.

Medicare for All — would reshape the sector in a way that might hurt investors, for better or worse. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. With a managed services agreement, AMN takes over the entire staffing and employee performance review process for a provider.

Some of the best healthcare stocks pay dividends — a portion of earnings that the company returns to shareholders. Dividends can boost the overall return you receive from owning a stock. Some P/E ratios are backward-looking, or reflecting earnings from a previous period . Forward P/E ratios, which use earnings estimates for one year into the future, can be more helpful in assessing the valuation of fast-growing healthcare stocks.