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 are watching the healthcare sector closely because some of these companies have received regulatory approval for drugs to treat COVID-19. Also, other companies are supplying products to test for and manage treatment of the virus, while many others are rushing to develop and win approval for new COVID-19 drugs.
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 12.0% over the past 12 months, below the Russell 1000's total return of 21.0%, as of February 22, 2021. The statistics in the tables below are as of February 22.
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)||603.54||18.0||4.8|
|Quidel Corp. (QDEL)||163.55||6.9||8.8|
|Cardinal Health Inc. (CAH)||52.13||15.3||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. On February 11, Bio-Rad reported Q4 2020 results. The company saw net sales increase by 26.5% year-over-year (YOY) while net income increased by 51.6% over the same period. Bio-Rad said that net sales benefited from a damages award related to intellectual property litigation.
- 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. In Q4 2020, total revenue grew more than five-fold as net income rose by more than 15-fold. Nearly 84% of revenue came from COVID-19 diagnostic products.
- Cardinal Health Inc.: Cardinal Health provides healthcare products and services, including customized solutions for physicians, hospitals, clinical laboratories, and pharmacies, as well as providing pharmaceutical distribution and drug delivery systems.
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)||256.51||16.9||1,600|
|Quidel Corp. (QDEL)||163.55||6.9||1,420|
|Horizon Therapeutics PLC (HZNP)||83.76||18.5||1,360|
- Insulet Corp.: Insulet is a medical device company. It develops and manufactures an insulin infusion system for people with insulin-dependent diabetes. For Q4 2020, Insulet saw revenue climb by 17.5% YOY as the company reported a net loss of $17.1 million. Net income for Q4 2019 was $5.0 million. Insulet reported a cumulative amortization expense of $14.6 million for the latest quarter.
- Quidel Corp.: See company description above.
- Horizon Therapeutics PLC: Horizon Therapeutics is an Ireland-based biopharmaceutical company that researches, develops, and markets late-stage biopharmaceutical therapies for the treatment of pain, inflammation, orphan diseases, and other illnesses.
Healthcare Stocks with the Most Momentum
These are the healthcare stocks that had the highest total return over the last 12 months.
|Healthcare Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Moderna Inc. (MRNA)||159.37||63.1||774.2|
|Teladoc Health Inc. (TDOC)||268.76||39.0||136.7|
|Horizon Therapeutics PLC (HZNP)||83.76||18.5||135.9|
|Health Care Select Sector SPDR ETF (XLV)||N/A||N/A||12.0|
- 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. In February, Moderna announced the sale of an additional 100 million doses of its COVID-19 vaccine to the U.S. government, bringing its confirmed order commit to 300 million through July. Moderna also announced the sale of an additional 150 million doses to the European Commission.
- Teladoc Health Inc.: Teladoc Health provides healthcare services. It offers diagnoses, treatment recommendations, and prescribes medication for routine medical issues through phone and video consultations.
- Horizon Therapeutics PLC: See company description above.
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YCharts. "Financial Data." Accessed Feb. 23, 2021.
Bio-Rad Laboratories Inc. "Bio-Rad Reports Fourth-Quarter and Full-Year 2020 Financial Results." Accessed Feb. 23, 2021.
Quidel Corp. "Quidel Reports Fourth Quarter and Full Year 2020 Financial Results." Accessed Feb. 23, 2021.
Insulet Corp. "Insulet Reports Full Year 2020 Revenue Increase of 23% and Fourth Quarter 2020 Revenue Increase of 18% Year-Over-Year." Accessed Feb. 23, 2021.
Moderna Inc. "U.S. Government Purchases Additional 100 Million Doses of Moderna’s COVID-19 Vaccine." Accessed Feb. 23, 2021.
Moderna Inc. "European Commission Purchases Additional 150 Million Doses of COVID-19 Vaccine Moderna." Accessed Feb. 23, 2021.