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 companies in the world include Johnson & Johnson (JNJ), Pfizer Inc. (PFE), and Merck & Co. Inc. (MRK). Health care stocks, as represented by the Health Care Select Sector SPDR ETF (XLV), have outperformed the broader market, providing investors with a total return of 6.8% compared to the S&P 500’s total return of 5.5% over the past 12 months. The market performance numbers and the statistics in the tables in this story are as of June 24.
Here are the top 3 health care stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Health Care Stocks
These are the health care 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 Health Care Stocks|
|Market Cap ($B)||12-Month Trailing P/E Ratio|
Biogen Inc. (BIIB)
|Bio-Rad Laboratories Inc. (BIO)||451.78||13.4||8.7|
|Alexion Pharmaceuticals Inc. (ALXN)||115.49||25.5||10.9|
- Biogen Inc.: Biogen focuses on the discovery, development, and commercialization of pharmaceutical treatments, with a strong focus on the fields of neurology, immunology, and oncology. In June, Biogen announced positive results from a longterm study of its drug, Spinraza, for the treatment of pre-symptomatic spinal muscular atrophy in children.
- Bio-Rad Laboratories Inc.: Bio-Rad is a maker of life science research products and analytical instrumentation. These tools are used to separate and analyze complex chemical and biological materials.
- Alexion Pharmaceuticals Inc.: Alexion is a biopharmaceutical company that researches and develops drug treatments for autoimmune and cardiovascular diseases. On June 24, the company announced successful results in the Phase 3 study of its drug Ultomiris in the treatment of a rare blood disease named paroxysmal nocturnal hemoglobinuria.
Fastest Growing Health Care Stocks
These are the health care stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Health Care Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|AmerisourceBergen Corp. (ABC)||101.50||20.7||3,470|
|Align Technology Inc. (ALGN)||267.41||21.1||2,060|
|Teleflex Inc. (TFX)||368.47||17.1||219.5|
- AmerisourceBergen Corp.: AmerisourceBergen provides generic pharmaceuticals, over-the-counter health care products, home health care supplies and equipment, and related services to health care providers. On May 7, the company reported fiscal results for its Q2 FY 2020, ended March 31. The company reported that diluted EPS soared roughly 3,470%, fueled mainly by income tax benefits.
- Align Technology Inc.: Align Technology designs and manufactures the Invisalign system, which is a method for treating the misalignment of teeth. On June 18, the company announced its partnership with MedTech Innovator, the medical technology industry’s leading startup accelerator. Align Technology will work specifically with MedTech Innovator’s Asia Pacific branch to mentor and foster the growth of promising early to mid-stage companies.
- Teleflex Inc.: Teleflex provides medical technology products to hospitals and health care providers for diagnostic and therapeutic procedures in critical care and surgical applications.
Health Care Stocks with the Most Momentum
These are the health care stocks that had the highest total return over the last 12 months.
|Health Care Stocks with the Most Momentum|
|Market Cap ($B)||12-Month Trailing Total Return (%)|
|DexCom Inc. (DXCM)||406.90||38.4||169.8|
|Regeneron Pharmaceuticals Inc. (REGN)||628.76||64.5||96.3|
|West Pharmaceutical Services Inc. (WST)||217.54||16.0||79.0|
|Health Care Select Sector SPDR ETF (XLV)||N/A||N/A||6.8|
- DexCom Inc.: DexCom is a medical device company that focuses on the design and development of continuous glucose monitoring systems for people with diabetes.
- Regeneron Pharmaceuticals Inc.: Regeneron Pharmaceuticals is a biopharmaceutical firm that discovers, develops, and markets treatments for a variety of serious medical conditions.
- West Pharmaceutical Services Inc.: West Pharmaceutical Services designs and manufactures packaging components, drug delivery systems, contract laboratory services and related products designed to bring new drug therapies to the public.
YCharts. “Financial Data,” Accessed June 24, 2020.
Biogen, Inc. “New Results From Landmark NURTURE Study Show That Pre-Symptomatic SMA Patients Treated With SPINRAZA® (nusinersen) Continue to Demonstrate Sustained Benefit From Treatment,” Accessed June 24, 2020.
Alexion Pharmaceuticals, Inc. “Alexion Announces Phase 3 Study of Weekly Subcutaneous ULTOMIRIS® (ravulizumab-cwvz) Met Primary Endpoint,” Accessed June 24, 2020.
AmerisourceBergen Corp. “AmerisourceBergen Reports Fiscal 2020 Second Quarter Results,” Accessed June 24, 2020.
Align Technology, Inc. “Align Technology Announces Partnership With MedTech Innovator Asia Pacific, Industry’s Leading Nonprofit Startup Accelerator,” Accessed June 24, 2020.