The healthcare sector encompasses two main industry groups. The first includes companies that manufacture healthcare equipment and supplies or provide healthcare-related services, including distributors of healthcare products, providers of basic healthcare services and owners and operators of healthcare facilities and organizations. 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. Healthcare stocks can be a great investment.
Stocks in the healthcare sector, which are holistically represented by the Health Care Select Sector SPDR ETF (XLV), have broadly outperformed the market as XLV has provided investors with a 1-year daily return of over 8%.
Here are the top healthcare stocks with the highest growth, greatest value, strongest momentum and most searches on Google.
Quick Look at the Best Healthcare Stocks:
Overview
The healthcare sector includes a broad range of companies like hospitals, pharmaceuticals, insurance agencies and medical equipment manufacturers. Most of these services are in operation 24/7, so these stocks can expose your portfolio to industries that operate throughout the year, uninterrupted.
Medical companies have stepped up research and development to find a vaccine in response to the pandemic. While major industries like banking, airlines and oil have been dumped by investors, several healthcare stocks have gained billions in capital to manufacture virus testing kits, personal protective equipment and ventilators to be distributed to hard-hit countries around the globe.
Best Online Brokers for Healthcare Stocks
You can track and trade the top healthcare stocks on major stock exchanges with an online broker. These innovative online platforms equip you with powerful tools to elevate your trading experience. If you are new to investing, we suggest browsing through these stocks under $20.
Take a look at these online brokers to get started.
Features to Look for in Healthcare Stocks
- Earnings per share: The earnings per share (EPS) of each stock is a good indication of the company’s profitability. EPS is calculated by taking the net income of the company and divided by the total number of its outstanding shares. A higher EPS means you stand to gain that much more from your investment.
- Yearly revenue: Companies generally publish reported earnings and revenue at the end of each quarter and at the end of the fiscal year. Compare the yearly revenue generated by each stock to assess its growth and potential returns.
- Medical innovations: Healthcare companies constantly research and develop new and improved ways to provide all types of care. Seek out information about medical breakthroughs that distinguish a healthcare company from its competitors before you invest.
Fortify Your Financial Health
Healthcare companies like hospitals and pharmaceuticals always operate in full swing. These stocks are not subjected to business cycles and can shield your assets when your other investments are going through a rough patch.
Looking for healthcare stocks by price? Check out the pages below.
Looking at stocks by industry? Review our other guides.
Don’t know where to start? Find a broker using Benzinga’s best brokerage guide.
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Experts predict that healthcare stocks will increase 6% annually until at least 2025, so it is a good idea to invest in healthcare.
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Healthcare companies have large upfront development expenses which can reduce profitability.
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The largest healthcare stock is UnitedHealth.