Blue-chip companies are very well established, have an excellent reputation and boast a history of providing investors with consistent returns. Blue-chip stocks are a must for investors because they are some of the most stable companies in the market and typically have lower volatility than other companies with not-so-stellar reputations. They also often give patient investors great returns over the long haul.
Healthcare companies are an essential addition to any investor’s portfolio, providing exposure to earnings from new medical discoveries and products. Below, I list three healthcare blue-chip stocks that have a significant market share, have seen consistent growth over the last several years and continue to have a positive outlook for the future.
UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) is headquartered in Minnetonka, Minnesota; it operates through multiple segments, including Optum Health, which provides care management and financial solutions for its customers, Optum Rx, pharmacy services and drug therapy. Optum Insight offers software products and the handing in of contracts for organizations, such as hospitals, and UnitedHealthcare includes health insurance plans for employers.
Over the past year, UnitedHealth saw a decrease in its stock price of 2%. But, within the last five years, its share price has more than doubled. The company has a total market cap of $493 billion and serves approximately 152 million customers worldwide. UnitedHealth also offers a dividend ratio of 1.41% on an annual basis.
UnitedHealth reported earnings for the third quarter on October 13. It stated that total revenue grew by 14% and net income increased by 12% year-over-year. Operating margins grew in all of the company’s business segments within the same period.
UnitedHealth is the largest healthcare company by market cap and offers investors a stable rate of return and decent dividend yield for the sector. And its recent positive earnings report is another reason investors should consider UnitedHealth.
Cigna Group (CI)
Cigna Group (NYSE:CI), located in Bloomfield, Connecticut, operates as an insurance provider that provides various health services, including pharmacy benefits and healthcare plans for domestic and international customers. Cigna also works directly with unions, employers and individuals.
Cigna Group is valued at a market cap of approximately $91 billion and has, in the last year, seen a drop in its share price of 5%. And it offers a dividend yield on an annual basis of 1.59%.
On August 3, Cigna reported earnings for the second quarter of 2023, which stated that net income fell by 8% and total revenue increased by 7% compared to the previous year. The company’s total pharmacy customers increased by 4% within the same period.
With a somewhat mixed earnings report recently, Cigna is still trading at a decent value compared to its peers, even after seeing an increase in its share price within the last six months of 21%.
McKesson (MCK)
McKesson (NYSE:MCK), located in Irving, Texas, operates through multiple different segments, besides surgical solutions, which provides physicians with surgical logistics; prescription tech, which helps patients treat medical issues and specific drug therapies; and its pharmaceutical segment, which produces branded and generic medications for distribution.
On August 2, McKesson reported its first-quarter fiscal 2024 results, which showed revenue growth of 11% and a net earnings boost of 25% year-over-year. McKesson also approved an additional $6 billion for its share buyback program.
Year-to-date, McKesson saw its share price grow by 22% due to strong financial results and a positive future outlook. Over the past year five years, the company’s stock price has more than tripled.
McKesson is performing very well amongst its peers in both financial results as well as shareholder returns. This is a great company for individuals looking to start investing in the healthcare industry.
As of this writing, Noah Bolton did not hold (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.
