According to the American Medical Association, U.S. healthcare spending totaled $4.3 trillion in 2021, equal to nearly $13,000 per person.
Overall medical expenses account for nearly 20% of U.S. gross domestic product (GDP). America today spends more on healthcare per capita than any other country. By 2030, one in five Americans (20%) is forecast to be age 65 or older.
For these reasons, the healthcare sector is a long-term, growth opportunity for investors. In fact, all segments are forecast to experience growth over the next 15 to 20 years. That list includes pharmaceutical companies, insurers, medical device manufacturers, and healthcare distribution companies.
Let’s delve into three healthcare stocks set to take off.
UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) is the largest healthcare company in the world and a steady, reliable performer. The company has successfully increased its revenue and earnings consistently throughout the decade.
Also, it enjoys a market leading position among U.S. healthcare insurers. Given the priority that individuals and businesses place on insurance premium payments, UNH stock is a good bet. And it will continue to be one even if the economy falls into a recession.
Fortunately for investors, UNH stock is on sale right now, having declined 2% on the year. The company’s share price is completely flat over the past 12 months.
However, over the last five years, UnitedHealth’s stock has nearly doubled. Right now, it’s trading at a reasonable price-earnings (P/E) ratio of 22. Additionally, it offers a quarterly dividend payment of $1.87 per share, giving it a yield of 1.47%. With a 12% market share, UnitedHealth Group remains the dominant healthcare insurer in the U.S.
Moderna (MRNA)
With Autumn officially here, reports indicate that Covid-19 infections are already rising around the world. Therefore, this could be an opportune time to take a position in Moderna (NASDAQ:MRNA).
As a leading producer of Covid-19 vaccines, its stock has been pummeled this year, falling 45%. While disheartening, the stock will likely rebound in coming months, especially with an anticipated increased demand for its Covid-19 vaccine.
Currently, Moderna forecasts that U.S. demand for its Covid-19 vaccine will be as high as 100 million doses this fall and winter. Beyond the U.S., Moderna has deals in place to supply the vaccine this winter to other countries, including Britain, Canada, and Japan. Additionally, Moderna has received approval for an updated version of its Covid-19 vaccine from the U.S. Food and Drug Administration (FDA).
Also, it has completed a regulatory submission for its new seasonal flu vaccine. Moderna said that trials have shown that its flu shot is equal or superior to other flu vaccines currently on the market.
MRNA stock remains up 427% over five years.
Intuitive Surgical (ISRG)
With elective surgeries on the rise once again, shares of Intuitive Surgical (NASDAQ:ISRG) have been marching higher. Over the last 12 months, ISRG stock has gained an impressive 55%.
Specifically, sales of its robotic surgical equipment are growing, particularly its da Vinci surgical system. This is used for specialty procedures related to urology, head and neck, thoracic, and colorectal procedures. Increasingly, Intuitive Surgical is repositioning da Vinci for more general surgical procedures.
The company is also pushing sales of the surgical instruments and accessories used in combination with the da Vinci system for procedures. The strategy appears to be paying off. ISRAG announced that worldwide da Vinci procedures during this year’s Q2 rose 22% year over year (YOY). The quarterly revenue of $1.76 billion was up 15% YOY. Over five years, ISRG stock is up 52%.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
