Best Healthcare Stocks to Buy in 2024: Your Essential Guide to Top Performers

Economic

Summary:

Discover the top healthcare stocks to invest in for 2024, from pharmaceutical giants to medical device innovators. Learn which companies offer the best growth and dividend opportunities in the healthcare sector.

The healthcare sector has long been considered a safe haven for investors, providing stability, growth potential, and attractive dividend yields. As healthcare spending continues to rise globally, companies within the sector offer opportunities for consistent returns, even in times of market volatility. In 2024, healthcare stocks remain a solid investment choice due to aging populations, advances in biotechnology, and increased demand for medical innovations. This article dives deep into the best healthcare stocks to buy, based on their performance, future potential, and the overall outlook for the sector.

1. Johnson & Johnson (JNJ)

Market Cap: $420 billion

Dividend Yield: 2.8%

P/E Ratio: 16.7

2024 YTD Performance: +12%

Johnson & Johnson remains a top pick for healthcare investors due to its diversified product portfolio spanning pharmaceuticals, medical devices, and consumer health products. The company’s pharmaceutical segment has driven growth, particularly with drugs like Stelara and Darzalex leading sales. J&J’s strong cash flow allows it to maintain its reputation as a reliable dividend stock, having increased its dividend for 61 consecutive years.

In 2024, J&J is expected to see continued demand for its cancer therapies and immunology drugs, while its medical device segment benefits from an aging population requiring more surgeries and medical procedures. Additionally, J&J's research into new drugs and treatments in oncology, immunology, and cardiovascular diseases positions the company for sustained long-term growth.

Why Buy? Johnson & Johnson offers a strong balance of growth and stability, with a focus on life-saving therapies and surgical innovations that keep its earnings steady even in economic downturns.

2. UnitedHealth Group (UNH)

Market Cap: $550 billion

Dividend Yield: 1.5%

P/E Ratio: 22.3

2024 YTD Performance: +14%

UnitedHealth Group is the largest healthcare company by revenue, primarily serving as a managed care organization and offering health insurance services. With the rise in healthcare costs and an increasing number of people needing insurance, UnitedHealth is well-positioned to capitalize on the growing demand for comprehensive health coverage.

In Q3 2024, UnitedHealth reported robust earnings, fueled by growth in its Optum segment, which focuses on healthcare services, technology, and pharmacy care. The company's diversified business model has enabled it to stay competitive and drive significant revenue growth across multiple healthcare sub-sectors.

Why Buy? UnitedHealth is a leader in healthcare services and insurance, with a proven ability to adapt to changing healthcare needs. Its continued growth in the insurance market and expansion into healthcare technology makes it a strong long-term investment.

3. Pfizer Inc. (PFE)

Market Cap: $200 billion

Dividend Yield: 4.0%

P/E Ratio: 11.9

2024 YTD Performance: +8%

Pfizer, a global pharmaceutical giant, gained significant attention during the COVID-19 pandemic for its development of the COVID-19 vaccine. While vaccine revenues have slowed in 2024, Pfizer remains a key player in the pharmaceutical space with a broad portfolio of drugs targeting various conditions, including oncology, immunology, and rare diseases.

Pfizer’s robust pipeline of drugs, including promising treatments for cardiovascular disease and cancer, gives it strong growth potential. Moreover, its high dividend yield makes it an attractive stock for income investors. In 2024, Pfizer is focusing on expanding its oncology and immunology drug offerings, which are expected to drive future revenue.

Why Buy? Pfizer combines a solid dividend yield with strong drug development capabilities, making it a good choice for those looking for a balance between income and growth potential in the healthcare sector.

4. AbbVie Inc. (ABBV)

Market Cap: $270 billion

Dividend Yield: 4.3%

P/E Ratio: 14.8

2024 YTD Performance: +10%

AbbVie has established itself as a top-performing healthcare stock, thanks to its blockbuster drug, Humira, which has been a major revenue driver. Although Humira's patent expired, the company has managed to offset revenue loss by focusing on new drugs like Rinvoq and Skyrizi in the immunology space. These drugs have seen strong uptake and are expected to continue growing in the coming years.

AbbVie’s acquisition of Allergan, which brought the Botox brand under its umbrella, further strengthened its position in the aesthetic and medical market. The company has also made advancements in oncology and neuroscience, adding to its already robust pipeline.

Why Buy? With a strong dividend yield and a diversified drug portfolio, AbbVie remains a top choice for investors looking for income and future growth, especially as its newer drugs take over as key revenue drivers.

5. Eli Lilly and Co. (LLY)

Market Cap: $500 billion

Dividend Yield: 1.0%

P/E Ratio: 33.5

2024 YTD Performance: +25%

Eli Lilly has been one of the standout healthcare stocks in 2024, thanks to the success of its diabetes drug Mounjaro, which has also shown promise in treating obesity. The company’s focus on metabolic diseases, particularly diabetes and obesity, has positioned it well to capture significant market share in these fast-growing areas.

Eli Lilly is also making strides in its Alzheimer’s drug research, which, if successful, could open up a multibillion-dollar market. Its innovation in the treatment of metabolic and neurological diseases has driven investor enthusiasm, pushing the stock higher throughout 2024.

Why Buy? Eli Lilly is at the forefront of drug innovation, with groundbreaking treatments in diabetes, obesity, and Alzheimer’s disease. Its strong pipeline and growth potential make it a top healthcare stock to buy for long-term investors.

6. Medtronic plc (MDT)

Market Cap: $120 billion

Dividend Yield: 3.0%

P/E Ratio: 18.2

2024 YTD Performance: +7%

Medtronic, a global leader in medical devices, has been a consistent performer in the healthcare sector. The company’s wide range of products, from heart devices to surgical tools, ensures steady demand for its offerings. Medtronic’s innovations in robotic-assisted surgeries and diabetes management have further bolstered its market position.

In 2024, Medtronic has continued to benefit from an aging global population requiring more surgical procedures and chronic disease management. The company’s commitment to R&D and product development keeps it at the cutting edge of medical technology, which should continue driving growth in the coming years.

Why Buy? Medtronic offers investors stability through its dividend and growth potential through its innovations in medical technology. As the need for surgical and chronic disease management solutions increases, Medtronic is well-positioned for long-term growth.

7. Thermo Fisher Scientific (TMO)

Market Cap: $225 billion

Dividend Yield: 0.3%

P/E Ratio: 27.9

2024 YTD Performance: +15%

Thermo Fisher Scientific is a leader in laboratory equipment and diagnostics, serving a wide range of industries, including pharmaceuticals, biotechnology, and healthcare. The company’s products are essential in drug research and development, and it continues to see strong demand for its diagnostic tools and laboratory services.

In 2024, Thermo Fisher has benefited from increased R&D spending across the healthcare and pharmaceutical industries. Its acquisition of companies that complement its existing portfolio has further strengthened its market presence.

Why Buy? Thermo Fisher’s leadership in the laboratory and diagnostics field makes it an attractive option for investors looking to capitalize on the growth in biotechnology and pharmaceutical R&D. Its innovative solutions and expanding portfolio make it a strong contender for long-term gains.

Conclusion

The healthcare sector offers a range of investment opportunities, from pharmaceutical giants to medical device leaders. The best healthcare stocks to buy in 2024 are those that balance growth with reliability, offering investors both income through dividends and the potential for capital appreciation. As healthcare needs continue to evolve, these companies are well-positioned to deliver strong returns for long-term investors. Whether you’re seeking steady dividend income or high-growth potential, the stocks mentioned in this article are solid picks for a diversified portfolio.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data