Best Healthcare Stocks of September 2023

Best Healthcare Stocks of September 2023

While Johnson & Johnson is often thought of for its consumer products, it actually makes far more than Q-tips and baby powder. For example, researchers at the company developed one of the three FDA emergency authorized Covid-19 vaccines, the only single-shot option currently available. Started in 1886, J&J has a whopping 130,000 employees space exploration stocks spread across operations in 60 countries. Currently, Novo employs more than 45,000 people and sells its wares in over 160 countries. It has also been named one of the best companies to work for for over a decade and in 2012 was named the most sustainable company in the world by Canadian media company Corporate Knights.

  • In the U.S., the Food and Drug Administration (FDA) oversees the regulation of drugs and medical devices.
  • Like many other industries, the healthcare sector underwent significant changes due to the COVID-19 pandemic.
  • Auvelity is currently being investigated as a therapy for agitation in Alzheimer’s disease; it’s undergoing a second phase 3 clinical trial along those lines, having aced the first.
  • Meanwhile, one in every four individuals is expected to experience a form of mental illness during their life.
  • 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.
  • For instance, the global stem cell treatment market is one of the fastest growing markets that you’re likely to come across.

But its weight-loss breakthroughs have elevated the company to a new level of success. Pfizer (PFE 3.37%) is one of the most seasoned pharmaceutical companies, formed from massive acquisitions over the years. It saw a resurgence during the pandemic when explosive demand for its COVID-19 vaccine created billions in profits. COVID-19 treatments did a staggering $56 billion in sales last year.

You don’t need a fortune to start investing.

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. AMN Healthcare Services (AMN, $90.01) is one of the world’s largest medical staffing providers, including temporary or permanent positions and traveling nurses. The company faces a positive outlook in the long term as a shortage of nurses and other healthcare professionals and staff continues amid an aging population that requires more medical care. Another way to get the benefit of investing in several health care stocks is through an exchange traded fund, or ETF — of which dozens are available. The first step to invest in health care stocks is to open a brokerage account if you haven’t already.

  • The Motley Fool has positions in and recommends Abbott Laboratories.
  • And as the global health insurance industry grows to $2.6 trillion by 2028, organic revenue can keep growing at a healthy pace.
  • Diabetes and heart disease are significant problems in a world struggling with obesity, so there should be continued demand for Abbott Labs’ products over the coming years.
  • That’s because routine access to healthcare is and will always be essential to promoting higher quality of life for patients.
  • Healthcare has evolved over the centuries, and Abbott Laboratories (ABT -1.29%) has been around since the 1800s because it has evolved with the industry.

That’s because UnitedHealth Group temporarily didn’t have to pay medical facilities for elective procedures, new prescriptions, and doctor visits. As a health insurer, UnitedHealth Group continued to collect its premiums from existing customers while adding new customers. Auvelity is currently being investigated as a therapy for agitation in Alzheimer’s disease; it’s undergoing a second phase 3 clinical trial along those lines, having aced the first.

Another stock that should be on the radar of dividend investors is the mega-cap health insurance company UnitedHealth Group (UNH -1.16%). Exelixis’ expertise in developing cancer medicines should lead to key approvals, stronger revenue and earnings, and solid stock-market performance — and all that at a share price equivalent to a few cups of coffee. The pandemic and technological advances have accelerated several key trends across the healthcare sector that provide potential opportunities for investors, among them telehealth and healthcare wearables.

With a new CEO in Joe Almeida, who came with a successful track record leading another medical device company (Covidien) we identified three sources of value latency for the new standalone Baxter. Don’t overlook the possibility that mergers and acquisitions (M&A) could boost a company’s growth prospects. Companies that have grown through M&A in the past could be looking for new deals to make in the future. The company also believes that Epidiolex, its drug to treat pediatric onset epilepsy, has the potential to be a blockbuster. It is the first and thus far only FDA-approved prescription cannabidiol (from cannabis plants) for treatment of patients one year and older. Turning Point’s lead drug candidate, repotrectinib, treats non-small cell lung cancer and other advanced solid tumors.

There will always be a healthcare industry, and it will always be a place to find great long-term stocks. When compiling our list of the best ETFs to buy, we included a wide selection of healthcare-related exchange-traded funds that meet several different investment objectives. The best healthcare ETFs give investors exposure to a defensive corner of the market – one that is likely to benefit from consistent demand and rising prices over the long term. Analysts have dramatically increased their growth estimates for the company due to Wegovy and Ozempic’s success. The stock is up more than 80% over the past year, but shares aren’t as expensive as you might assume. The stock’s PEG ratio of 1.8 comes from its forward P/E of 37 and estimated earnings growth rate of nearly 20%.

Click to continue reading and see the 5 Best Healthcare Stocks To Buy Now. The Motley Fool has positions in and recommends Axsome Therapeutics, Pfizer, and Teladoc Health. Pfizer could reach as much as $84 billion in revenue — not counting its coronavirus products — in 2030. These recent endorsements are significant in the context of a global pandemic. Moreover, an EPS beat of 15.28% in June 2023 indicates that Pfizer can still deliver positive surprises. Reductions in certain types of medical treatment during 2020 caused UnitedHealth Group’s net margin to inch higher from 5.7% in 2019 to 6% in 2020.

Market Outlook: The Important Post-Election Statement

In the long term, a growing world population, especially among the aged, will raise demand for healthcare services. Sustaining growth can be challenging for some Pitch the Perfect Investment types of healthcare stocks. Companies that make drugs and medical devices must convince health insurers and government agencies to continue buying their products.

Financial strength

An endless need for better treatments and cures demands innovation and growth, which isn’t a bad place to find long-term winners you can stick in a diversified portfolio. Cramer said that health care stocks have stayed relatively steady this year because they tend to be recession-resistant stocks — in other words, they perform well regardless of the state of the economy. Medtronic’s remarkable reach is the byproduct of both its dedication to research and development (R&D) to spur cutting-edge product development, and an innovative corporate culture. The company’s $2.7 billion in R&D spending to fund 239 clinical trials in fiscal year 2023 amounted to nearly 9% of its $31.2 billion for the fiscal year. Along with the nearly 50,000 patents that the company already has stacked up within its portfolio, this should power revenue and earnings higher over time. Since its founding in 1949, Medtronic has established itself as a trusted name and a leader within the medical devices space.

What are the risks of investing in healthcare stocks?

With this in mind, here are the nine best healthcare stocks to buy now. Each name featured here has a free cash flow yield that is higher than 4%, attractive dividend yields and/or improving fundamentals. However, the virus isn’t the only frontier for the healthcare industry. The industry is busy tackling diseases and other areas that would have been thought to be impossible just a couple of years ago. For instance, the global stem cell treatment market is one of the fastest growing markets that you’re likely to come across. The stem cell industry is one of the most advanced sectors not only in healthcare but also in other unrelated sectors simply due to the complexity of the products involved.

It acquired Aetna to add health insurance to its model in 2018 and bought Oak Street Health earlier this year to provide primary care. Diabetes and heart disease are significant problems in a world struggling with obesity, so there should be continued demand for Abbott Labs’ products over the coming years. Analysts believe the company’s EPS will grow by an average of 7% annually over the long term so that investors could see mid-single-digit dividend increases and steady price appreciation over time. Speaking of smaller stocks, what if you want to leapfrog the most prominent healthcare companies out there and instead focus on development-stage biotechnology firms with dynamic potential? The company is one of the world’s largest; annual revenue is nearing $350 billion. Analysts believe earnings-per-share (EPS) will increase by more than 12% annually over the long term.

Healthcare stocks should have healthy returns

In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm. To identify cheap healthcare stocks we first made a list of all healthcare companies Most profitable trading strategies that have a price to earnings ratio of less than 10. Out of these, the cheapest in terms of the lowest P/E ratio were selected and are listed below. As shareholders wait for Medtronic to grow its sales and profits, they can collect an enticing 3.2% dividend yield. Better yet, with the dividend payout ratio poised to come in around 55% this fiscal year, the market-doubling dividend is also safe.

As such, it serves as a way to keep clients when temp placement agencies are easily replaced. Moderna also is working on a vaccine for propionic acidemia, which is the body’s inability to process certain parts of proteins and fats properly. Other drugs in the pipeline include one for heart failure and another for cystic fibrosis, the latter in collaboration with Vertex Pharmaceuticals (VRTX). Beyond Covid, the mRNA technology has the potential to revolutionize the drug development process. AbbVie’s acquisition of Allergan in 2020 further diversifies its business.