Healthcare, one of the largest and most complex sectors, is comprised of a broad range of companies that sell medical products and services. The healthcare sector includes companies that sell drugs, medical devices, and insurance, as well as hospitals and healthcare providers. Some of the largest healthcare companies in the world include UnitedHealth Group Inc. (UNH), Pfizer Inc. (PFE), and Abbvie Inc. (ABBV). Investors have watched the healthcare sector closely in recent months as companies in this area are heavily involved in developing new drugs and managing the COVID-19 pandemic crisis.
Healthcare stocks, as represented by the Health Care Select Sector SPDR ETF (XLV), have underperformed the broader market. XLV has provided investors with a total return of 13.4% over the past 12 months, well below the Russell 1,000’s total return of 21.2%. The performance figures above are as of December 18 and the statistics in the tables below are as of December 21.
Here are the top 3 healthcare stocks with the best value, the fastest growth, and the most momentum.
Best Value Healthcare Stocks
These are the healthcare stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Healthcare Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Bio-Rad Laboratories Inc. (BIO)||605.87||18.1||5.2|
|Biogen Inc. (BIIB)||249.62||38.4||8.3|
|CVS Health Corp. (CVS)||69.55||91.0||11.5|
- Bio-Rad Laboratories Inc.: Bio-Rad is a maker of life science research products and analytical instrumentation. These tools are used to separate and analyze complex chemical and biological materials. The company recently announced its outlook through 2023, including a prediction of FY 2023 sales between $2.75 billion and $2.85 billion. Bio-Rad had net sales of $2.3 billion in FY 2019.
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and oncology.
- CVS Health Corp.: CVS Health is an integrated pharmacy healthcare provider. The company provides services including pharmacy benefit management, mail order delivery, and retail sales. It also operates disease management programs and retail clinics. On December 21, CVS Health announced that it had begun administering COVID-19 vaccinations at long-term care facilities across the U.S. It expects the vaccination program to reach 4 million residents and staff at 40,000 facilities.
Fastest Growing Healthcare Stocks
These are the healthcare stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Healthcare Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Insulet Corp. (PODD)||240.65||15.9||1,600|
|Horizon Therapeutics PLC (HZNP)||69.68||15.4||1,360|
|Quidel Corp. (QDEL)||189.50||8.0||1,300|
- Insulet Corp.: Insulet is a medical device company. It develops and manufactures an insulin infusion system for people with insulin-dependent diabetes.
- Horizon Therapeutics PLC: Horizon Therapeutics is a biopharmaceutical company that develops, acquires, and sells therapies designed for the treatment of pain and inflammation. The company’s products also target specialty diseases. On December 17, Horizon announced that TEPEZZA, its biologic treatment for Thyroid Eye Disease, would face short-term production disruptions. The cause is government-mandated COVID-19 vaccine production at its contract manufacturer, Catalent. Horizon expects the shortage to last through the end of the first quarter of 2021.
- Quidel Corp.: Quidel develops and manufactures diagnostic healthcare products and solutions. The company offers diagnostic solutions that aid in the detection and diagnosis of critical diseases and other medical conditions. Quidel reported on December 21 that it had received Emergency Use Authorization from the U.S. Food and Drug Administration (FDA) for the marketing of its QuickVue® SARS Antigen test, a tool used in the process of diagnosing COVID-19. The test yields results in 10 minutes. The company aims to produce 600 million QuickVue® tests per year by the end of 2021.
Healthcare Stocks with the Most Momentum
These are the healthcare stocks that had the highest total return over the last 12 months.
|Healthcare Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Moderna Inc. (MRNA)||140.23||55.5||652.3|
|Quidel Corp. (QDEL)||189.50||8.0||162.8|
|Acceleron Pharma Inc. (XLRN)||134.95||8.1||158.1|
|Healthcare Select Sector SPDR ETF (XLV)||N/A||N/A||13.4|
- Moderna Inc.: Moderna is a clinical stage biotechnology company focused on the discovery and development of messenger RNA therapeutics and vaccines. It develops mRNA medicines for infectious, immuno-oncology, and cardiovascular diseases. Moderna announced on December 18 that the FDA had authorized its COVID-19 vaccine for emergency use. The U.S. government had ordered 200 million doses as of that date, with the option to purchase up to an additional 300 million doses. The company intends to submit a license application in 2021 for full U.S. licensure for the product.
- Quidel Corp.: See company description above.
- Acceleron Pharma Inc.: Acceleron Pharma is a pharmaceutical company that discovers, develops, markets, and sells protein therapeutics for cancer and other diseases.