Top Healthcare Stocks for June 2022

AZTA, MRNA, and MCK lead the pack for value, growth, and momentum, respectively

Healthcare, one of the largest and most complex sectors, is composed 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., Pfizer Inc., and AbbVie Inc.

The healthcare sector has caught investors’ attention since some of these companies have received regulatory approval for drugs to treat COVID-19 and begun distributing vaccines. Other companies are rushing to develop and win approval for their own COVID-19 drugs while others are supplying products to test for and manage treatments of the virus.

Healthcare stocks, as represented by the Health Care Select Sector SPDR ETF (XLV), an exchange-traded fund (ETF), have outperformed the broader market. Healthcare stocks posted a total return of 5.9% over the past year compared to the Russell 1000’s total return of -7.0%. The market performance figures and the statistics in the tables below are as of May 20, 2022.

Here are the top three healthcare stocks with the best value, fastest growth, and 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 that you’re paying less for each dollar of profit generated.

Best Value Healthcare Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Azenta Inc. (AZTA) 69.62 5.2 2.4
Embecta Corp. (EMBC) 27.75 1.6 4.0
Quidel Corp. (QDEL) 99.91 4.2 4.2

Source: YCharts

  • Azenta Inc.: Azenta is a life sciences company providing sample management and genomic services including drug development, sample and material storage, and clinical trial management. Its customers are pharmaceutical, biotechnology, and life sciences research companies and institutions.
  • Embecta Corp.: Embecta, a diabetes management company, became an independent public company after the completion of its spinoff by BD on April 1, 2022. Embecta makes and markets pen needles, syringes, safety devices, and digital apps for people living with diabetes. The company reported Q2 FY 2022 results for the period ended March 31 on May 13. Net income declined by 26.2% on falling revenues year-over-year (YOY). The results were driven by declines in volume of goods sold and prices, among other factors. Embecta was spun off from Becton, Dickinson and Co. (BDX) on April 1, 2022.
  • Quidel Corp.: Quidel manufactures, and markets rapid diagnostic tests for use in physician offices, hospitals, laboratories, and over-the-counter settings, among others. On May 16, the company reported that its stockholders had voted to approve its acquisition and business combination with Ortho Clinical Diagnostics Holdings plc. The acquisition, which is valued at approximately $6 billion, is expected to close on May 27, 2022.

Fastest Growing Healthcare Stocks

These are the top healthcare stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Healthcare Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Moderna Inc. (MRNA) 136.25 57.0 202.1 213.2
United Therapeutics Corp. (UTHR) 188.33 8.5 724.6 21.8
Quidel Corp. (QDEL) 99.91 4.2 176.5 167.0

Source: YCharts; Pfizer Inc.

  • Moderna Inc.: Moderna is a biotech company that focuses on RNA therapeutics, primarily mRNA vaccines. It offers a clinical portfolio of vaccines and therapeutics including one of the earliest vaccines against the COVID-19 pandemic. On May 11, the company announced that its recently-appointed chief financial officer, Jorge Gomez, had left the company effective immediately. The news followed a May 10 public disclosure by Gomez's former employer of an ongoing internal investigation into financial reporting. The company's recently-retired former CFO, David Meline, will continue in the position while Moderna resumes its search for a new CFO.
  • United Therapeutics Corp.: United Therapeutics is a pharmaceutical company. It markets products used in the treatment of pulmonary arterial hypertension and certain vascular diseases, primarily. On May 4, United Therapeutics reported financial results for Q1 2022, ended March 31. Net income soared by more than 748% on more modest revenue growth YOY, driven by net unrealized and realized gains and losses on equity securities as well as net product sales growth.
  • Quidel Corp.: See company description above.

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 (%)
McKesson Corp. (MCK) 322.86 46.9 62.5
Eli Lilly and Co. (LLY) 298.85 284.0 51.9
AbbVie Inc. (ABBV) 151.01 266.9 34.5
Russell 1000 N/A N/A -7.0
Health Care Select Sector SPDR ETF (XLV) N/A N/A 5.9

Source: YCharts

  • McKesson Corp.: McKesson is a global healthcare company that provides products, distribution and services to a broad range of customers including retail pharmacies, specialty practices, surgery centers, physicians offices, healthcare providers, and nursing homes.
  • Eli Lilly and Co.: Eli Lilly, a pharmaceutical company, is one of the world's largest makers of psychiatric drugs such as Prozac, Cymbalta, and Zyprexa. The company was the first to mass-produce the polio vaccine and insulin.
  • AbbVie Inc.: AbbVie is a pharmaceutical company that produces a variety of drugs, including Humira, an anti-inflammatory medication and one of the world's best-selling drugs. It also makes Lupron for prostate cancer and Androgel, a testosterone booster. On May 20, the company reported that it had submitted a New Drug Application to the U.S. Food and Drug Administration (FDA) for ABBV-951, an investigational drug for the treatment of motor fluctuations in patients with advanced Parkinson's disease.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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  1. YCharts. “Financial Data.”

  2. BD. "BD Announces Completion of Embecta Corp. Spinoff."

  3. Embecta Corp. "Embecta Corp. Reports Second Quarter and First Six Months of Fiscal Year 2022 Financial Results and Provides Financial Guidance for the Last Six Months of Fiscal Year 2022."

  4. Quidel Corp. "Quidel Announces Stockholder Approval of Ortho Acquisition and Business Combination."

  5. Quidel Corp. "Quidel Corporation Signs Definitive Agreement to Acquire Ortho Clinical Diagnostics."

  6. Moderna Inc. "Departure of Jorge Gomez and Continuation of David Meline as Chief Financial Officer."

  7. United Therapeutics Corp. "United Therapeutics Corporation Reports First Quarter 2022 Financial Results."

  8. AbbVie Inc. "AbbVie Submits New Drug Application to U.S. FDA for Investigational ABBV-951 (Foscarbidopa/Foslevodopa) for the Treatment of Advanced Parkinson's Disease."

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