All in all, there are about 76 million baby boomers in the U.S. today. And the Census Bureau estimates that that 61 million will be around when the youngest boomers hit 65 in 2029.
There’s one thing these baby boomers can’t avoid — going from ‘boomers,’ to ‘elderly.’
Healthcare will never be the same and it’s going to be the best drug companies, insurers and suppliers and distributors that will be the next great growth stocks for the next two decades.
According to the American Hospital Association, more than 37 million boomers will be managing more than one chronic condition by 2030, with one out of four, or 14 million, living with diabetes; almost half will be living with arthritis and more than one-third, or over 21 million, will be classified as obese and living with all the health risks associated with obesity.
If you think Obamacare has changed the face of healthcare, you ain’t seen nothing yet.
These seven large-cap healthcare companies are already dominating their sectors and should continue their leadership well into the next decade.
7 Large-Cap Healthcare Stocks to Buy: Gilead Sciences, Inc. (GILD)
Market cap: $149.8 billion
Gilead Sciences, Inc. (NASDAQ:GILD) is a leading biopharmaceutical company that specializes in antiviral medications for HIV and liver disease (hepatitis B and C). It also produces a host of antiviral medications, including Tamiflu for influenza.
One of its major focuses in on developing single-tablet regimens for its drugs so that patients can take one pill instead of multiple tablets.
GILD is also on the acquisition hunt to keep its earnings growing. The rumor is a bid for Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) for about $40 or $50 billion. However, some analysts think buying 10 companies at $1 billion each would make more sense.
Either way, look for GILD to make headlines with merger and acquisition activity in the near future.
In the meantime, GILD has a strong portfolio of drugs and a healthy pipeline. It has seven drugs in Phase III studies right now.
7 Large-Cap Healthcare Stocks to Buy: Biogen Inc (BIIB)
Market cap: $88.4 billion
Biogen Inc (NASDAQ:BIIB) has been on a tear for more than half a decade — BIIB stock is up 635% in the past five years.
And even its latest first-quarter numbers won’t slow it down in the long term. BIIB earnings came it at $3.82 compared to estimates of $3.91. Revenue was $2.5 billion for the quarter, which was below Street estimates of nearly $2.7 billion. Sales of its top-selling multiple sclerosis drug stagnated in the quarter.
So that’s the bad news.
The good news? Earnings were still up nearly 55% from last year and revenue was up almost 20%. Suffice it to say, BIIB is still on a powerful growth trend.
What’s more, BIIB is now making significant headway into Alzheimer’s treatments and cutting-edge real-time medication monitoring, both of which could be even bigger than its current stable of products.
7 Large-Cap Healthcare Stocks to Buy: UnitedHealth Group Inc (UNH)
Market cap: $106.8 billion
As healthcare changes, so does the way we pay for it. Insurers are the ultimate arbiter of who gets what for how long and for how much. And one of the biggest players in this space is UnitedHealth Group Inc (NYSE:UNH)
Insurers are the gatekeepers for the consumer and they increasingly watch over how much drug companies and healthcare providers charge for medicines, procedures, hospital stays, doctor visits — you name it.
UNH is about a vertically integrated as you can get. It operates everything from healthcare insurers to healthcare intelligence and data management companies, as well as serving the state and federal governments with Medicare and Medicaid.
These latter two categories will be rising significantly as baby boomers hit the golden years. And UNH is already nailing it: earnings from operations were up 33% year-over-year, and margins increased 20% year-over-year.
7 Large-Cap Healthcare Stocks to Buy: Anthem Inc (ANTM)
Market cap: $40.3 billion
The other big player in this classification is Anthem Inc (NYSE:ANTM).
Compared to UNH, ANTM is more focused on managed care plans and less diversified in the healthcare management space.
That hasn’t hampered its growth, however. The stock is up 50% in the past year.
Adjusted net income for the quarter was up 29%, membership was up almost 3% and operating revenue was up almost 7% from the year-ago quarter. And ANTM pays a dividend that is higher than Apple Inc. (NASDAQ:AAPL), with a hefty share buyback to boot.
7 Large-Cap Healthcare Stocks to Buy: Cardinal Health Inc (CAH)
Market cap: $28.1 billion
Beyond the drugs to help patients and the insurers to cover them, the other aspect of healthcare that is in a major, long-term growth trend is the equipment makers and behind-the-scenes players that support pharmacies, hospitals and practices.
Cardinal Health Inc (NYSE:CAH) is in the business of helping support healthcare providers with the products and equipment they need on a daily basis.
CAH started in the early 1970s as a food distributor but moved into pharmaceutical distribution almost a decade later. Now it has annual revenues of more than $6 billion. It has grown by smart acquisitions and continues its solid rise.
CAH also kicks off a 1.5% dividend, which may not be much but is a nice kicker along with steady long-term growth.
7 Large-Cap Healthcare Stocks to Buy: Abbott Laboratories (ABT)
Market cap: $70.2 billion
Abbott Laboratories (NYSE:ABT) is on this list because it, more or less, develops the products that a company like CAH would distribute. It’s a major force in testing equipment and supplements for eye health, diabetes and heart health.
First-quarter earnings were up 38% year-over-year, reflecting a very healthy environment for the company in the era of Obamacare and cost-conscious spending, as well as a growing demographic of customers.
The stock has a nice dividend of 2% at current prices. It’s not a rocket ship to profits — but it’s a good steady train ride.
7 Large-Cap Healthcare Stocks to Buy: Becton, Dickinson and Co. (BDX)
Market cap: $29.4 billion
Becton, Dickinson and Co (NYSE:BDX) specializes in medical technology, making medical supplies, devices, laboratory equipment and diagnostic products. That means everything from needles and syringes to molecular diagnostics. It has the lab side and disposable technologies down.
And talk about investor-friendly — BDX has increased it dividend for 43 consecutive years. Granted, it’s only delivering a 1.7% dividend, but adding that to a 26% return in the past year doesn’t hurt.
Its prospects for a solid long-term hold continue to grow more compelling as well. Bear in mind that the stock averaged 11% a year for the past 10 years. And there’s no reason it can’t do better than that moving forward.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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