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 slightly underperformed the broader market. XLV has provided investors with a total return of 16.8% over the past 12 months, just below the Russell 1,000’s total return of 19.2%. The performance figures above and the statistics in the tables below are as of November 17.
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)||592.57||17.7||5.1|
|Biogen Inc. (BIIB)||248.81||38.3||8.2|
|CVS Health Corp. (CVS)||67.14||87.9||11.1|
- 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. For Q3 2020, Bio-Rad reported 15.5% year-over-year (YOY) net sales growth, helping the company to post a profit after a $258.8 million net loss a year earlier.
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and oncology. On November 18, Samsung Bioepis Co. Ltd. and Biogen announced that the U.S. Food and Drug Administration (FDA) had accepted for review the license application for a biosimilar product referencing ranibizumab, a drug used to treat retinal vascular disorders.
- CVS Health Corp.: CVS Health is an integrated pharmacy healthcare provider. The company provides services including pharmacy benefit management, mail order delivery, and retail sales. It also operates disease management programs and retail clinics.
Fastest Growing Healthcare Stocks
These are the healthcare stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Healthcare Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Insulet Corp. (PODD)||259.61||17.1||1,600|
|Horizon Therapeutics PLC (HZNP)||71.47||15.8||1,360|
|Quidel Corp. (QDEL)||194.60||8.2||1,300|
- Insulet Corp.: Insulet is a medical device company. It develops and manufactures an insulin infusion system for people with insulin-dependent diabetes. For Q3 2020, Insulet reported a 21.8% YOY increase in revenue and net income of $11.6 million. Based on the latest quarter’s performance, the company sharply increased its full-year 2020 revenue outlook.
- Horizon Therapeutics PLC: Horizon Therapeutics is a biopharmaceutical company that develops, acquires, and sells therapies designed for the treatment of pain and inflammation. The company’s products also target specialty diseases.
- Quidel Corp.: Quidel develops and manufactures diagnostic healthcare products and solutions. The company offers diagnostic solutions that aid in the detection and diagnosis of critical diseases and other medical conditions. For Q3 2020, the company reported a 276.4% YOY gain in net revenue, driven by soaring demand for Quidel’s Sofia® SARS Antigen and Lyra® SARS-CoV-2 tests due to the COVID-19 pandemic.
Healthcare Stocks with the Most Momentum
These are the healthcare stocks that had the highest total return over the last 12 months.
|Healthcare Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Moderna Inc. (MRNA)||93.15||36.9||380.9|
|Quidel Corp. (QDEL)||194.60||8.2||203.2|
|Acceleron Pharma Inc. (XLRN)||113.85||6.9||177.9|
|Healthcare Select Sector SPDR ETF (XLV)||N/A||N/A||16.8|
- 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. On November 16, the company announced that its vaccine candidate to treat COVID-19, mRNA-1273, had a vaccine efficacy of 94.5% based on Phase 3 studies. Moderna expects to have roughly 20 million doses available to ship within the U.S. by the end of the year.
- 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.
YCharts. “Financial Data.” Accessed Nov. 18, 2020.
Bio-Rad Laboratories, Inc. “Bio-Rad Reports Third-Quarter 2020 Financial Results.” Accessed Nov. 18, 2020.
Biogen, Inc. “Samsung Bioepis and Biogen Announce FDA Filing Acceptance of SB11, A Proposed Biosimilar Referencing Lucentis® (ranibizumab).” Accessed Nov. 18, 2020.
Insulet Corp. “Insulet Reports Third Quarter 2020 Revenue Increase of 22% Year-Over-Year.” Accessed Nov. 18, 2020.
Quidel Corp. “Quidel Reports Third Quarter 2020 Financial Results.” Accessed Nov. 18, 2020.
Moderna, Inc. “Moderna’s COVID-19 Vaccine Candidate Meets its Primary Efficacy Endpoint in the First Interim Analysis of the Phase 3 COVE Study.” Accessed Nov. 18, 2020.