Healthcare, one of the largest and most complex sectors, is comprised of a broad range of companies that sell medical products and services. The healthcare sector includes companies that sell drugs, medical devices, and insurance, as well as hospitals and healthcare providers. Some of the largest healthcare companies in the world include UnitedHealth Group Inc. (UNH), Pfizer Inc. (PFE), and Abbvie Inc. (ABBV). The healthcare sector has caught investors’ attention since some of these companies have received regulatory approval for drugs to treat COVID-19 and begun distributing vaccines, and others are rushing to develop and win approval for new COVID-19 drugs. There are also companies involved in various other ways, such as supplying products to test for and manage treatments of the virus.
Healthcare stocks, represented by the Health Care Select Sector SPDR ETF (XLV), have underperformed the broader market. XLV’s total return was 26.3% over the past 12 months, below the Russell 1000’s total return of 40.7%, as of June 21, 2021. The statistics in the tables below are also as of June 21.
Here are the top 3 healthcare stocks with the best value, the fastest growth, and the most momentum.
These are the healthcare 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 Healthcare Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Agios Pharmaceuticals Inc. (|
|Bio-Rad Laboratories Inc. (|
|Sage Therapeutics Inc. (|
- Agios Pharmaceuticals Inc.: Agios is a clinical-stage biopharmaceutical company that develops therapeutics in the field of cancer metabolism. It develops drugs that focus on glycolysis, fatty acid metabolism, and autophagy. On June 21, the company submitted to the Food and Drug Administration a New Drug Application (NDA) for mitapivat for the treatment of adults with pyruvate kinase deficiency (PK), which can lead to chronic fatigue, gallstones, liver cirrhosis, pulmonary hypertension and other health problems. There are currently no approved therapies for this condition.
- 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.
- Sage Therapeutics Inc.: Sage Therapeutics creates treatments for central nervous system disorders including schizophrenia and major depressive disorder. The company reported positive trial developments in its SAGE-718 drug in Q1 2021. The drug has the potential to be used in the treatment of Huntington disease, a progressive brain disease impacting movement, cognition, and psychiatric health.
These are the top healthcare stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year over year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Healthcare Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|PerkinElmer Inc. (|
|PPD Inc. (|
|Boston Scientific Corp. (|
- PerkinElmer Inc.: PerkinElmer is a provider of technology, services, and solutions to the diagnostics, life sciences, and other markets. Its products include equipment used for genetic screening and drug discovery, optoelectronics, analytical instruments, and more. On June 22, the company announced that it had agreed to acquire SIRION Biotech GmbH, a provider of viral vector-based technologies used in cell and gene therapies. The acquisition is expected to close in Q3 and the terms were undisclosed at the time of the press release.
- PPD Inc.: PPD operates as a global contract research organization. It engages in drug discovery, clinical development, lifecycle management, and laboratory services. It provides services to pharmaceutical, biotechnology, medical device, and government organizations.
- Boston Scientific Corp.: Boston Scientific specializes in minimally invasive medical devices and markets a variety of products used in endoscopy, cardiology, urology, and more. In May, the company completed CE Mark for its EXALT Model B Single-Use Bronchoscope, a device used for a variety of bedside procedures. Sales of the product in Europe began in June.
These are the healthcare stocks that had the highest total return over the last 12 months.
|Healthcare Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|NovoCure Ltd. (|
|Moderna Inc. (|
|Acadia Healthcare Co. Inc. (|
|Health Care Select Sector SPDR ETF (XLV)||N/A||N/A||26.3|
- NovoCure Ltd.: NovoCure is a commercial-stage oncology company. It researches and develops technologies for the treatment of cancer. The company’s headquarters are located in Jersey, a dependency of the British Crown.
- Moderna Inc.: Moderna is a clinical-stage biotechnology company focused on the discovery and development of messenger RNA therapeutics and vaccines. It develops mRNA medicines for infectious, immuno-oncology, and cardiovascular diseases. Since mid-June, the U.S. government has purchased 200 million doses of the company’s COVID-19 vaccine, for a total of approximately 500 doses purchased. The European Commission purchased 150 million additional doses, bringing its total purchased to approximately 460 million.
- Acadia Healthcare Co. Inc.: Acadia Healthcare provides psychiatric and chemical dependency services through a network of centers. The company also offers inpatient psychiatric services, residential treatment, outpatient clinics, and related services.
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