This makes the entrenched positioning of existing sector participants even more powerful. Some of the companies discussed above also have unique risks, mainly because they crossover with other market sectors. WELL Health Technologies, for instance, is a tech company, which makes them vulnerable to investor sentiment in the tech space. Over the past 12 months, Andlauer Healthcare Group Inc. (AHG) has exhibited stable financial performance.
In addition, it offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for financing employer-paid future benefit obligations. The company distributes its products and services through insurance brokers and consultants; directly to employers, unions and other groups, or individuals; and private and public exchanges. The company was formerly known as Cigna Corporation and changed its name to The Cigna Group in February 2023. The Cigna Group was founded in 1792 and is headquartered in Bloomfield, Connecticut. Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products.
Pros of Johnson & Johnson
Some of these, such as Medical Properties Trust, are real estate investment trusts, or REITs, which own hospital buildings and lease them to operators. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. The continued legalization of marijuana means growth for companies in this sector. This change in current trends means that we may see this industry experience even more growth in the near future. Their offerings include diabetes management, hypertension control, and weight-loss programs, all integrated into a comprehensive digital platform.
Why Invest In Healthcare Stocks
And the upside to multiple years of sluggish performance is that valuations across the sector have recently looked quite attractive, offering a potential entry point to a sector with profound long-term drivers. It’s worth digging into health care stocks because of their ability to transcend what’s happening in the economy. Merck & Co, Inc is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Undoubtedly there are opportunities for major returns for investors looking to the health care sector. The companies above led the sector in our screen, but past performance is not a guarantee of health care stocks future returns.
Dominant Position in Unique Autoimmune Condition Treatment
- The Healthcare sector has a total of 1111 stocks, with a combined market cap of $7.62 trillion, total revenue of $4.3 trillion and a weighted average PE ratio of 36.40.
- While Guardant Health currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
- Recent changes to Medicare allow the program to negotiate prices for some high-cost drugs with pharmaceutical companies.
- This type of clinical trial is increasingly in demand because it tends to be more cost-effective and to run over a shorter timeframe than other types of trials.
- As mentioned above, health care stocks are generally considered to be a safety play.
Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. For 2025 and beyond, I believe many health care industries may be well positioned. Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Moreover, I’ve been seeing a lot of green shoots in terms of novel, viable drug candidates in biotechnology, which gives me optimism about the growth prospects for this innovative sector. And excitement around new obesity and diabetes treatments helped turn Eli Lilly () and Denmark’s Novo-Nordisk ()1 into 2 of the largest pharmaceutical firms on the planet, as measured by market capitalization. And policy uncertainty inherent in an election year likely weighed on the sector as a whole. Some investors prefer its defensive qualities – which in many cases includes above-average dividend yields, especially out of established pharmaceutical names. Choose the number of shares you want to purchase and hit the “buy” button.
Industries in This Sector
- The company has collaboration agreements with Bristol-Myers Squibb Company; Astellas Pharma US, Inc.; Merck KGaA; and BioNTech SE.
- He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016.
- Investing in the stock market can sometimes feel like taking a “shot in the dark.” However, some industries, such as hospital stocks, have proven to be safer and more stable investments.
- Intuitive Surgical also markets Ion, a robotic system for minimally invasive peripheral lung biopsy.
- Healthcare is a $300 billion market sector that makes up roughly 12.7% of Canada’s GDP.
- Healthcare companies that crossover with the tech industry (one of the most volatile sectors) will be less stable than, say, senior living facilities.
Moreover, eight in 10 surveyed said their primary health issue was resolved and that they would likely use telehealth in the future. A handful of stocks are trading with extremely high short interest — in some cases over 30% of the float. Tempus AI recently released its Olivia AI-enabled personal health app, which is designed to use AI-assisted insights to provide more personalized health guidance to users. Short interest trends indicate investor confidence, with short interest rates falling by more than 12% since last month. RPRX currently carries a potential upside of 29.86% for an aggregate price target of $41.60.
Healthcare sector stocks refer to shares of companies involved in providing medical services, manufacturing healthcare products, or offering health-related solutions. This includes industries such as pharmaceuticals, biotechnology, medical devices, health insurance, and hospitals. These companies play a crucial role in improving public health by developing treatments, technologies, and providing essential healthcare services. The second group of companies is primarily involved in the research, development, production and marketing of pharmaceuticals and biotechnology products. This sector includes some of the world’s most well-known and largest companies, such as CVS Health, Moderna, Pfizer, and UnitedHealth Group. The Cigna Group, together with its subsidiaries, provides insurance and related products and services in the United States.
The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ. Community Health Systems’ diverse service offerings and extensive network position it well in the health care facilities sector. This could potentially make it a strong candidate for investors looking to invest in healthcare stocks. Acadia’s strategic growth initiatives and strong market presence could make it a valuable addition to a diversified investment portfolio. Its commitment to providing comprehensive treatment centers positions it well in the healthcare stocks market.
Teladoc ended up being one of the biggest pandemic winners as it combined technology with healthcare and communication services. The health care sector is massive, complex, and rich with opportunities for investors willing to take the time to understand its ins and outs. Our screen favors companies in the pharmaceuticals space that have experienced strong returns in the last month, occasionally due to the success of a popular drug or other product. But just as some of these firms may rise rapidly, they may also fall just as precipitously, particularly if a promising new product ends up not working as expected.
Some health care ETFs, such as the Health Care SPDR Select Sector Fund, are sector-wide ETFs — basically, health care index funds — that include companies from all of the industries discussed above. Health insurers and pharmacy benefit managers are sometimes collectively referred to as “payers,” as their role is to arrange payment for health care services. TransMedics Group (TMDX 4.3%) developed and sells the Organ Care System (OCS), a system for transporting lungs, hearts, and livers intended for transplantation.
Novo also has a biopharmaceutical segment (constituting roughly 15% of revenue) that specializes in protein therapies for hemophilia and other disorders. Health care companies are enticing to investors because they are highly incentivized to use and create new technology, both to meet rising demand and to improve the affordability of care they can offer. This focus on innovation may mean that health care stocks offer the potential for short- and long-term gains. The health care sector was among the hardest hit by the COVID-19 pandemic and has yet to fully recover; the sector continues to face a significant labor shortage that has been exacerbated by ongoing inflation concerns. Going forward, the health care sector will wrestle with a growing population of patients who are eligible for Medicaid and Medicare, opportunities presented by AI, and more.
Its forward yield is now a juicy 3.4% (compared to the S&P 500’s average of 1.3%), and the company has increased its payouts every year since initiating a dividend in 2011. Healthcare investors looking for income stocks should strongly consider Amgen. Existing growth drivers include Tezspire for asthma, first approved in the U.S. in 2021; its sales in the second quarter grew 46% year over year to $342 million. Tepezza, a therapy for thyroid eye disease first launched in 2020, also looks promising. And in Amgen’s pipeline, products such as MariTide for weight loss, and the investigational stomach cancer medicine bemarituzumab (which recently completed a phase 3 study), also appear to be future top performers. Its portfolio is also well-diversified across several therapeutic areas.
