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 treatments to consumers, hospitals and health care providers, as well as companies that sell services such as medical care, 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 9.5% compared to 18.1% for the S&P. All figures are as of November 20, 2019.
Below, we'll take a look at the top 3 stocks in the health care sector for December 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)||285.43||51.5||10.2|
|Pfizer Inc. ( PFE)||37.66||208.4||13.2|
|Celgene Corp. ( CELG)||108.13||77.0||13.3|
- Biogen Inc.: As its name suggests, Biogen is a biotechnology company focused on the discovery and development of new drug treatments. This firm focuses on medical needs in the neurology field primarily, although it also has treatments in the areas of immunology and hematology. Throughout 2019, Biogen has drawn attention as it has made efforts to develop an experimental Alzheimer's drug. Biogen halted its development efforts in March, but has resumed plans to file for Food and Drug Administration (FDA) approval.
- Pfizer Inc.: Pfizer is a pharmaceutical company that develops medicines, medical devices, vaccines, and other products related to oncology, cardiovascular issues, and more. Recently, Pfizer has been focusing its energies on a merger between its Upjohn division and Mylan N.V., a European pharmaceutical company. The new company will be named Viatris.
- Celgene Corp.: Celgene is a biopharmaceutical firm that discovers and develops cancer and immune-inflammatory disease treatments. The company recently received FDA approval for a drug treatment for anemia in certain adult patients.
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 (%)|
|Incyte Corp. (INCY)||87.94||18.9||212.9|
|Teleflex Inc. (TFX)||353.83||16.4||201.3|
|DaVita Inc. (DVA)||72.41||9.4||194.7|
- Incyte Corp.: Biopharmaceutical company Incyte focuses on the discovery, development, and commercialization of oncology drugs. In Q3 2019, Incyte announced clinical success in a critical trial phase of its drug named ruxolitinib.
- Teleflex Inc.: Teleflex designs and manufactures medical technology products. This firm has a focus on single-use medical devices for diagnostic and therapeutic procedures as well as surgeries. For Q3 2019, Teleflex reported revenue from continuing operations of $648.3 million, an increase of 6.3% YOY.
- DaVita Inc.: DaVita specializes in kidney dialysis services for patients with end-stage renal disease and similar kidney issues. This company serves patients across the U.S. in close to 3,000 outpatient centers. In Q3 2019, DaVita repurchased roughly 30.6 million common stock shares in a major stock buyback effort.
Health Care Stocks with the Most Momentum
These are the health care stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Health Care Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Edwards Lifesciences Corp. (EW)||243.56||50.8||62.5|
|Celgene Corp. (CELG)||108.13||77.0||55.8|
|Dentsply Sirona Inc. (XRAY)||56.39||12.5||53.9|
|S&P 500 (SPY)||--||--||18.1|
|Health Care Select Sector SPDR ETF (XLV)||--||--||9.5|
- Edwards Lifesciences Corp.: With a focus on the treatment of cardiovascular diseases, Edwards Lifesciences creates and markets products including heart valves, monitor systems, and investigational devices. In Q3 2019, Edwards Lifesciences reported sales of $1.1 billion, a 21% increase.
- Celgene Corp.: See company description above.
- Dentsply Sirona Inc.: The only company on this list to focus on dental supplies, Dentsply Sirona manufactures a variety of specialized instruments, dental prosthetics and sealants, orthodontic appliances, and more. The company's Q3 2019 GAAP EPS rose 192%.