Personal health and wellness is one of the many secular tailwinds for healthcare companies. Despite the rosy long-term prospects, short-term headwinds such as COVID inventory destocking have harmed the industry’s returns - over the past six months, healthcare stocks have collectively shed 11.1%. This drop was worse than the S&P 500’s 4% decline.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here is one healthcare stock boasting a durable advantage and two that may face trouble.
Market Cap: $139.2 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Does GILD Worry Us?
At $109.50 per share, Gilead Sciences trades at 14.3x forward price-to-earnings. Check out our free in-depth research report to learn more about why GILD doesn’t pass our bar.
Market Cap: $12.69 billion
Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE:RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.
Why Do We Pass on RVTY?
Revvity is trading at $104.99 per share, or 21.2x forward price-to-earnings. Read our free research report to see why you should think twice about including RVTY in your portfolio, it’s free.
Market Cap: $394.5 billion
Founded in 1886 and known for its iconic red cross logo, Johnson & Johnson (NYSE:JNJ) is a global healthcare company that develops and sells pharmaceuticals, medical devices, and technologies focused on human health and well-being.
Why Do We Like JNJ?
Johnson & Johnson’s stock price of $164.49 implies a valuation ratio of 15.7x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
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