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 group includes companies that sell drugs and medical devices, hospitals and health care providers, as well as companies that sell services such as insurance and related products. 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 underperformed relative to the S&P 500, with the Health Care Select Sector SPDR ETF (XLV) returning 20.3% compared to 30.0% for the S&P. All figures are as of January 6, 2020.
Below, we'll take a look at the top 3 stocks in the health care sector for January 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|
|Biogen Inc. (BIIB)||290.85||52.5||10.3|
|Pfizer Inc. ( PFE)||38.93||215.4||13.6|
|Walgreens Boots Alliance, Inc. (WBA)||59.08||52.5||13.7|
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on medical needs in the neurology, immunology, and hematology fields. The company recently authorized a program to repurchase up to $5.0 billion in common stock.
- Pfizer Inc.: Pfizer is a pharmaceutical company that develops medicines, medical devices, vaccines, and other products related to oncology, cardiovascular issues, and more.
- Walgreens Boots Alliance Inc.: Walgreens Boots Alliance owns and operates more than 18,750 pharmacy and health care retail stores in 11 countries.
Health Care Stocks with the Fastest Earnings Growth
Here are the health care stocks in the S&P 500 with the highest year-over-year earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Health Care Stocks with the Fastest Earnings Growth|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Centene Corp. (CNC)||61.16||25.3||360.0|
|Incyte Corp. (INCY)||77.90||16.8||321.4|
|Teleflex Inc. (TFX)||374.62||17.3||300.8|
- Centene Corp.: Centene provides health care coverage to uninsured and under-insured individuals through a variety of government subsidized programs including Medicaid.
- Incyte Corp.: Incyte focuses on the discovery, development, and commercialization of oncology drugs. The company just announced that Phase 3 trials for Itacitinib, a treatment for graft-versus-host disease, did not meet objectives.
- Teleflex Inc.: Teleflex designs and manufactures medical technology products, focusing on single-use medical devices for diagnostic and therapeutic procedures as well as surgeries. The company just received FDA approval for the UroLift system, used in the treatment of prostate issues.
Health Care Stocks with the Most Momentum
These are the health care stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Health Care Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Zoetis Inc. (ZTS)||134.16||63.9||65.5|
|Edwards Lifesciences Corp. (EW)||231.63||48.3||61.2|
|Danaher Corp. (DHR)||154.15||107.2||58.7|
|Health Care Select Sector SPDR ETF (XLV)||--||--||20.3|
- Zoetis Inc.: Zoetis develops, manufactures, and distributes medicines and diagnostic products used in the care of livestock and household pets.
- Edwards Lifesciences Corp.: With a focus on the treatment of cardiovascular diseases, Edwards Lifesciences creates and markets products such as heart valves, monitor systems, and exploratory medical devices.
- Danaher Corp.: Danaher develops and distributes medical and dental diagnostic products and services including microscopes, centrifuges, prosthesis, digital imaging systems, and more.
Yahoo Finance. "Charts," Accessed Jan 6, 2020.
Yahoo Finance. "Charts," Accessed Jan 6, 2020.
Biogen Investor Relations. "Other Events," Page 1. Accessed Jan 7, 2020.
Incyte Investor Relations. "Incyte Announces Results of Phase 3 Study of Itacitinib in Patients with Treatment-Naïve Acute Graft-Versus-Host Disease," Accessed Jan 7, 2020.
Teleflex Investor Relations. "Teleflex Announces FDA Clearance for Expanded Indication of the UroLift® System for Treatment of Larger Prostates, Up to 100cc," Accessed Jan 7, 2020.