SPECIAL REPORT The Top 7 Stocks for 2024

7 Healthcare Stocks to Buy for the Long Term


healthcare stocks - 7 Healthcare Stocks to Buy for the Long Term

Source: Shutterstock

I hope you like roller coasters, because it looks likes we’re on a long one at this point. Central banks are raising rates in the U.S. and Europe, plus China is still trying to revive growth. Meanwhile, Russia and its satellites are trying to avoid implosion. That’s why I’m talking about healthcare stocks.

These stocks are relatively immune to the geopolitical turmoil that is swirling around, as well as all the instability. Healthcare is a broad sector that has everything from insurers and equipment to device and drug manufacturers. It’s not just big pharmaceutical and biotech companies.

The one thing these picks have in common is that demand for healthcare makes it a growth industry. Not super-growth, mind you, but reliable, steady growth. And who doesn’t need some reliability in their portfolio these days?

With that in mind, here are seven healthcare stocks to buy for the long term:

  • Anthem (NYSE:ANTM)
  • UnitedHealth Group (NYSE:UNH)
  • Centene Corp (NYSE:CNC)
  • Quest Diagnostics (NYSE:DGX)
  • West Pharmaceutical Services (NYSE:WST)
  • PerkinElmer Inc (NYSE:PKI)
  • Danaher (NYSE:DHR)

Healthcare Stocks: Anthem (ANTM)

The Anthem logo on a sign outside of Anthem World Headquarters

Source: Jonathan Weiss / Shutterstock.com

Originally launched in 1944, Anthem has slowly digested most of the Blue Cross Blue Shield properties around the U.S. It is now the for-profit tip of that healthcare insurer’s spear.

Anthem also has life insurance and managed care plans, including Medicare and Medicaid. It provides pharmaceutical benefit management (PBM) services that are very important profit centers for insurers these days.

With a market capitalization of $116 billion, it’s a big player but it isn’t massive. Anthem’s influence in the market is significant, covering many states and large corporations.

ANTM stock has done well during this market upheaval and over the past 12 months. It’s up 4% year-to-date (YTD) and 36% year-over-year (YOY). Yet it still trades at a price-to-earnings (P/E) ratio below 20x. Anthem also has a 1% dividend, making it worth your time to reinvest in its shares and slowly add to your position.

This stock has an “A” rating in my Portfolio Grader.

UnitedHealth Group (UNH)

The UnitedHealth (UNH) headquarters in Minnetonka, Minnesota.

Source: Ken Wolter / Shutterstock.com

When you’re a company in the top 10 of the Fortune Global 500, you’re a pretty massive company. That’s where UnitedHealth Group finds itself.

With a market cap nearing $480 billion, this is a massive, vertically integrated health insurance company. It’s a leader in the industry and has a seat at every table when it comes to healthcare reform. It sets the industry standard and remains the sector’s bellwether.

But its most attractive quality is that it represents stability in a volatile market. For example, UNH stock has seen an average 33% annual gain for the past three years. And in the past 12 months, it has gained nearly 40%.

It trades at a P/E ratio nearing 28x. That’s still below the 10-year average P/E ratio for the S&P 500, but it’s not cheap. Nor should it be — UNH stock is a top performer come what may.

This stock has an “A” rating in my Portfolio Grader.

Healthcare Stocks: Centene Corp (CNC)

stethoscope on a stock chart representing healthcare stocks to buy

Source: Shutterstock

One of the biggest sectors in the healthcare system is providing federal and state government programs like Medicare and Medicaid to people. Centene operates as the middleman between patients and the government to deliver these resources while following the guidelines for care and treatment.

Centene’s role is more specific and focused than a big insurer, which can expand services and operations in different areas to add to margins or hedge its market exposure. It has a reliable growth path, but its downside safety also means its upside is a bit more reserved. But in the current market, stocks like this are highly valued.

That’s why CNC stock has gained 37% in the past 12 months and nearly 5% YTD. It will see more growth in the coming quarters as hospitals and doctors get back to normal treatment schedules and Covid case numbers fall.

This stock has a “B” rating in my Portfolio Grader.

Quest Diagnostics (DGX)

Quest Diagnostics Patient Service Center in San Francisco Bay Area

Source: Sundry Photography / Shutterstock.com

Every part of the healthcare sector represents something crucial to the whole. So it is with Quest Diagnostics.

One of the most important aspects of quality healthcare is diagnosing the problem. Quest Diagnostics plays a key role in this chain because it specializes in running tests to confirm diagnoses. It’s one of the largest companies in the world that provides this service.

These are the kind of healthcare stocks that many investors forget about in the massive industry. They’re behind the scenes, but crucial to a functioning modern healthcare system. Companies like Quest Diagnostics are also part of a huge growth industry in countries that are building these systems.

DGX stock has had a bumpy ride so far in 2022, but it’s now trading at a P/E ratio below 10x. It has plenty of gas in the tank to finish the year strong.

This stock has a “B” rating in my Portfolio Grader.

Healthcare Stocks: West Pharmaceutical Services (WST)

The West Pharmaceutical Services (WST) logo is displayed on a smartphone screen.

Source: rafapress / Shutterstock.com

Let’s say you’re a pharmaceutical company and have developed a new drug. How do you deliver it? If it’s an injectable, you talk to West Pharmaceutical Services. Since 1923, it has been developing drug delivery solutions for healthcare facilities and organizations.

If you can imagine a medical facility without the use of syringes, intravenous tubes or other devices for medicine delivery, then you can imagine a world without West Pharma. But given that this concept seems absurd, you can get an idea of how crucial this company is among top-notch healthcare stocks.

What’s more, its operations are global. Therefore, its customer base for testing, vaccines, diabetes and more is present on most of the continents.

WST stock has risen nearly 50% in the past 12 months, and that includes losing almost 12% YTD. That means it’s on sale now and a worthy buy for the long term.

This stock has a “B” rating in my Portfolio Grader.

PerkinElmer Inc (PKI)

Biochemical/biotech research scientist team working with microscope

Source: shutterstock.com/MAD.vertise

While Quest Diagnostics specializes in running tests for healthcare, PerkinElmer is further up the chain in the diagnostics sector. It provides the testing equipment, reagents, assays and everything else needed to make the testing happen.

With a $23 billion market cap, PerkinElmer isn’t one of the top players in this sector, but it’s still a substantial company. It also provides diagnostics equipment and tools for food safety, environmental research, life sciences and other markets.

That kind of diversity means PerkinElmer’s revenue is that much more protected from the vagaries of a single market. It has a global business with a diverse client list in 190 countries.

PKI stock has gained 41% in the past 12 months, even after giving back 9% YTD. But that’s fine since it’s now trading at a P/E ratio of 22x. The sector is well-positioned to grow well into 2023.

This stock has a “B” rating in my Portfolio Grader.

Healthcare Stocks: Danaher (DHR)

image of laptop screen displaying danaher (DHR) website

Source: madamF / Shutterstock.com

When it comes to diagnostics companies, Danaher is at the front of the line. It’s a leader in the sector and one of the world’s top healthcare stocks.

With a market cap of $208 billion, it has significant exposure to the top healthcare markets across the globe. China is very keen on building out a world-class healthcare system for its 1.4 billion citizens, and Danaher is well-received there. It also has stable long-term relationships across North America and Europe.

DHR stock is up 32% in the past 12 months. Investors have been looking to offset some of the wild economic growth with quality companies that have real earnings and revenue. This stock fits that description and has plenty of growth left for years to come.

This stock has a “B” rating in my Portfolio Grader.

On the date of publication, Louis Navellier had positions in UNH, CNC, DGX, and WST in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

Article printed from InvestorPlace Media, https://investorplace.com/2022/03/7-healthcare-stocks-to-buy-for-the-long-term/.

©2024 InvestorPlace Media, LLC