Health care, one of the largest and most complex sectors, is comprised of a broad range of companies that sell medical products and services. The health care sector includes companies that sell drugs, medical devices, and insurance, as well as hospitals and health care providers. Some of the largest health care stocks in the world include Johnson & Johnson (JNJ) and Pfizer, Inc. (PFE). In the trailing 12-month period, the health care sector has slightly outperformed relative to the S&P 500, with the Health Care Select Sector SPDR ETF (XLV) posting a total return of 0.8% compared to a decline of 0.9% for the S&P in the trailing 12 months. All figures are as of March 13, 2020.
Below, we'll take a look at the top 3 stocks in the health care sector for April in terms of the best value, the fastest earnings growth, and the most momentum.
Health Care Stocks with the Best Value
Here are the health care stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. 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.
|Health Care Stocks with the Best Value|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E|
|Alexion Pharmaceuticals Inc. (ALXN)||76.71||17.0||7.1|
|Biogen Inc. (BIIB)||268.88||46.8||8.5|
|Boston Scientific Corp (BSX)||31.00||43.3||9.3|
- Alexion Pharmaceuticals Inc.: Biopharmaceutical company Alexion researches and develops drug treatments for autoimmune and cardiovascular diseases. In January, Alexion completed its acquisition of Achillion Pharmaceuticals, Inc. The acquisition adds two clinical-stage Factor D inhibitor pharmaceutical products to Alexion's pipeline.
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and hematology. A Biogen company meeting in Boston in February has been tied to an outbreak of COVID-19 that has sickened dozens, including many Biogen employees.
- Boston Scientific Corp.: Specializing in minimally invasive medical devices, Boston Scientific markets a variety of products used in endoscopy, cardiology, urology, and more.
Health Care Stocks with the Fastest Earnings Growth
Here are the health care stocks in the S&P 500 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.
|Health Care Stocks with the Fastest Earnings Growth|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Gilead Sciences Inc. (GILD)||68.58||86.7||91,710.0|
|Dentsply Sirona Inc. (XRAY)||39.93||8.8||4,500.0|
|Edwards Lifesciences Corp. (EW)||187.02||39.1||4,300.0|
- Gilead Sciences Inc.: Gilead Sciences is a biopharmaceutical company that develops and markets therapeutics designed to advance the care of diseases including HIV, AIDS, and liver disease, among others. Gilead's drug remdesivir, an experimental antiviral treatment, has shown promise in fighting COVID-19, which has recently bolstered the company's stock.
- Dentsply Sirona Inc.: Dentsply Sirona makes and delivers dental supplies, including endodontic products, prosthetics, and more, on a global basis. In Q4 2019, Dentsply Sirona reported quarterly revenue of $1.1 billion, up 4.9% YOY.
- Edwards Lifesciences Corp.: Edwards Lifesciences is a medical technology company focused on the production of heart valves and similar products.
Health Care Stocks with the Most Momentum
These are the health care stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Health Care Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|ResMed Inc. (RMD)||136.12||19.7||34.0|
|DaVita inc. (DVA)||68.25||8.6||33.0|
|Zoetis Inc. (ZTS)||120.28||57.1||26.4|
|Health Care Select Sector SPDR ETF (XLV)||--||--||0.8|
- ResMed Inc.: ResMed focuses on the development and manufacturing of products used to diagnose and treat sleep-disordered breathing. In its most recent quarter, Q2 FY 2020, ResMed reported YOY quarterly revenue growth of 13% to $736.2 million.
- DaVita Inc.: Working primarily with customers suffering from chronic kidney failure, DaVita provides kidney dialysis services worldwide.
- Zoetis Inc.: Zoetis develops, manufactures, and distributes medicines and diagnostic products used in the care of livestock and pets. In late February, the company received FDA approval for Simparica Trio, the first all-in-one preventative medicine for heartworm, ticks, fleas, roundworm, and hookworm in dog.
YCharts. "Financial Data," Accessed March 16, 2020.
Alexion Pharmaceuticals, Inc. "Alexion Completes Acquisition of Achillion," Accessed March 16, 2020.
CNN.com. "70 of 92 coronavirus cases in Massachusetts linked to Biogen employees after biotech firm's Boston meeting," Accessed March 16, 2020.
NIH.gov. "NIH clinical trial of remdesivir to treat COVID-19 begins," Accessed March 16, 2020.
Dentsply Sirona, Inc. "Dentsply Sirona Reports Fourth Quarter and Full Year 2019 Results," Accessed March 16, 2020.
ResMed, Inc. "ResMed Inc. Announces Results for the Second Quarter of Fiscal Year 2020," Accessed March 16, 2020.
Zoetis, Inc. "Zoetis Receives FDA Approval for Simparica Trio™, A New Combination Parasite Preventative for Dogs," Accessed March 16, 2020.