7 Healthcare Stocks to Keep Your Portfolio in Tip-Top Shape


  • Thermo Fisher (TMO): Thermo Fisher’s vast product portfolio makes it supremely relevant.
  • Patterson Companies (PDCO): Patterson demonstrates recent financial improvement.
  • Abbott Laboratories (ABT): Consistent performer in medical devices with a solid earnings outlook.
  • Read more about these top healthcare stocks to buy and hold today!
Healthcare Stocks - 7 Healthcare Stocks to Keep Your Portfolio in Tip-Top Shape

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With rising concerns in the market potentially forcing a strategic shift, investors may want to consider healthcare stocks. No matter what happens, people need access to health-related products and services. It’s one of the essentials of life, which makes the industry such a politically sensitive matter.

Besides the critical need, another element that helps bolster the case for healthcare stocks is the underlying diversity. Yes, the sector centers on the pharmaceutical innovation space. However, the arena covers multiple specialties, from retail pharmacy to insurance.

Finally, many of these enterprises have a long track record. That may come in handy should turbulent weather materialize. On that note, below are top healthcare stocks to consider.

Thermo Fisher (TMO)

A Thermo Fisher Scientific sign out front of an office in Silicon Valley, California.
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Operating under the diagnostics and research category, Thermo Fisher (NYSE:TMO) provides life sciences solutions, analytical instruments, specialty diagnostics and laboratory products and biopharmaceutical services. It’s known for important solutions such as reagents and instruments which are used for biological and medical research. While it doesn’t necessarily grab headlines, Thermo Fisher plays a critical role for other healthcare stocks.

Financially, it’s not the most exciting opportunity available. Aside from a miss in the second quarter, Thermo last year either met its bottom-line target or slightly exceeded it. For fiscal 2024, experts anticipate the company to produce earnings per share of $21.56 on sales of $42.85 billion. That’s practically in line with last year’s results of $21.55 EPS on revenue of $42.86 billion.

So, why bother with TMO? Basically, irrespective of rumblings either in healthcare stocks or broadly, Thermo Fisher products will likely be in strong demand. So, unless you anticipate a complete collapse of the health-oriented industry, TMO offers a confidence booster.

Patterson Companies (PDCO)

An image of a phone displaying the Patterson Companies, Inc. (PDCO) logo
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Listed under the medical distribution category, Patterson Companies (NASDAQ:PDCO) engages in the distribution of dental and animal health products in the U.S., U.K. and Canada. Its dental business unit offers various products, including infection control, restorative materials and instruments. For animal health, Patterson distributes biologicals, pharmaceuticals and vaccines, among other products.

Financially, the company was all over the map last year. For example, in Q1, it posted EPS of 84 cents against an expected haul of 70 cents. However, in Q3, Patterson badly missed, generating EPS of 50 cents while experts called for 58 cents. Still, in Q4, management improved the business, missing the bottom-line target by one cent per share.

Moving forward, experts believe EPS will reach $2.32 on sales of $6.56 billion. That’s somewhat disappointing compared to last year’s print of earnings of $2.42 on revenue of $6.47 billion. Still, growth could come in fiscal 2025 when sales are projected to reach $6.76 billion. In addition, Patterson offers a forward annual yield of 3.74%.

For conservative investors, PDCO could be one of the healthcare stocks to consider.

Abbott Laboratories (ABT)

Close up of Abbott Laboratories sign at their headquarters in Silicon Valley
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Working under the medical devices space, Abbott Laboratories (NYSE:ABT) discovers, develops, manufactures and sells healthcare products worldwide. It operates in four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Medical Devices. It offers solutions for myriad chronic diseases as well as devices for the management of certain conditions.

While not the most exciting enterprise among healthcare stocks, Abbott is a consistent workhorse. Last fiscal year, the company’s worst performance came in Q4, when it merely met the $1.10 EPS target. Overall, the average positive earnings surprise last year came out to 2.73%.

For fiscal 2024, covering experts anticipate EPS to hit $4.24 on sales of $38.72 billion. These stats represent a modest improvement over last year’s results of $4.09 EPS on revenue of $36.97 billion. Do note that fiscal 2025 is projected to see the top line expand to $41.48 billion.

Lastly, it’s worth pointing out that Abbott offers a forward dividend yield of 1.99%. It’s one of the top-tier healthcare stocks for conservative investors.

Johnson & Johnson (JNJ)

A red Johnson & Johnson (JNJ) sign hangs inside in Moscow, Russia.
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A global powerhouse among healthcare stocks, Johnson & Johnson (NYSE:JNJ) researches, develops, manufactures and sells various products in the underlying field worldwide. With the spinoff of its consumer healthcare products as a separate, publicly traded enterprise, J&J now focuses on pharmaceuticals and medical technologies. Theoretically, the streamlined business should help the health giant navigate turbulent waters.

To be fair, the company hasn’t always had the greatest financial print, which adds context to the aforementioned spinoff. In the first half of last year, J&J posted an average earnings surprise of nearly 3% below breakeven. However, in the second half, the average surprise came out to just over 3%.

For the current fiscal year, analysts believe EPS will hit $9.81 on revenue of $81.5 billion. That’s a solid improvement (relatively speaking) over last year’s results of $9.14 EPS on sales of $78.49 billion.

What may attract even more investors is J&J’s forward dividend yield of 3.14%. It’s also attractively priced at a trailing-year earnings multiple of 12.52X.

UnitedHealth Group (UNH)

The UnitedHealth (UNH) headquarters in Minnetonka, Minnesota.
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Focusing on healthcare plans, UnitedHealth Group (NYSE:UNH) operates as a diversified play among healthcare stocks. Per its public profile, UnitedHealth operates through four segments: UnitedHealthcare, Optum Health, Optum Insight and Optum Rx. It covers a wide range of services, from its insurance business to its community health pharmacy services.

Like other enterprises in the ecosystem, UnitedHealth isn’t exactly what you call an exciting enterprise. However, one of its core strengths is consistency. Last year, the company beat bottom-line projections four times out of four. Overall, the average positive earnings surprise came out to 2.9%.

For fiscal 2024, experts anticipate EPS of $25.54 on sales of $369.56 billion. That’s a decent improvement over last year’s results, which saw earnings of $23.15 on revenue of $342.52 billion. What’s more, fiscal 2025 could yield EPS of $28.83 on a top line of $398.13 billion.

Finally, UnitedHealth offers a forward yield of 1.53%. It’s not the most generous yield but UNH provides a mix of growth and passive income opportunities.

CVS Health (CVS)

The logo for CVS Pharmacy is displayed on a retail storefront.
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One of the most recognizable names among healthcare stocks, CVS Health (NYSE:CVS) covers multiple areas of the underlying industry. Most notably, it operates a retail pharmacy network, providing everyday utility for millions of patients. As well, it features healthcare benefits and services units, making it a powerhouse in the ecosystem. Still, it has incurred momentum issues, to put it politely.

Since the start of the year, CVS stock slipped more than 9%. In the past 52 weeks, it has gone nowhere, losing almost 4%. Still, more respect should be given to the company’s consistent performances. In fiscal 2023, CVS beat all its quarterly bottom-line targets. In fact, the average positive earnings surprise came out to just over 5%.

For fiscal 2024, analysts are looking at a modest print, anticipating EPS of $8.30 on revenue of $370.81 billion. Last year, the company posted $8.74 EPS on sales of $357.78 billion. Concerns about competition naturally weigh down the enterprise.

Nevertheless, CVS stock’s forward earnings multiple of 8.47X seems low considering its recent profitability uptrend. Plus, the company offers a forward dividend yield of 3.63%.

Pfizer (PFE)

blue Pfizer logo on the windows of a corporate building PFR stock
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Listed under the drug manufacturing segment of healthcare stocks, Pfizer (NYSE:PFE) represents another powerhouse name. Per its corporate profile, the company discovers, develops, manufactures, markets, distributes and sells biopharmaceutical products. It gained a notable brand boost when it helped forward a Covid-19 vaccine. However, since fears of the SARS-CoV-2 virus faded, PFE has struggled for traction.

Since the start of the year, shares slipped 10%. In the past 52 weeks, they’re down almost 36%. A big part of this erosion was the accelerated demand loss from Covid vaccines. Still, when accounting for the reality of this impact, Pfizer deserves more respect. Last fiscal year, the company beat all its quarterly bottom-line targets. The average positive surprise came out to an impressive 59.63%.

For the current fiscal year, analysts are looking at EPS of $2.20 on revenue of $60 billion. Last year, the biopharma posted $1.84 EPS on sales of $58.5 billion.

For contrarians, PFE trades at a lowly forward earnings multiple of 12.21X. It also offers a hearty dividend yield of 6.27%.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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