Top Healthcare Stocks for April 2022

Healthcare, one of the largest and most complex sectors, is composed 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., Pfizer Inc., and AbbVie Inc.

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. Other companies are rushing to develop and win approval for their own COVID-19 drugs while others are supplying products to test for and manage treatments of the virus.

Healthcare stocks, as represented by the Health Care Select Sector SPDR ETF (XLV), an exchange-traded fund (ETF), have outperformed the broader market. Healthcare stocks posted a total return of 20.3% over the past year compared to the Russell 1000’s total return of 15.5%. The market performance figures and the statistics in the tables below are as of March 24, 2022.

Here are the top three healthcare stocks with the best value, fastest growth, and 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 that you’re paying less for each dollar of profit generated.

Best Value Healthcare Stocks
Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Bio-Rad Laboratories Inc. (BIO) 564.30 17.0 4.1
Walgreens Boots Alliance Inc. (WBA) 47.12 40.6 6.3
Moderna (MRNA) 179.7 72.4 6.4

Source: YCharts

    • Bio-Rad Laboratories Inc.: Bio-Rad Laboratories develops and manufactures a wide array of products for the life science research and clinical diagnostic markets. Its customers include university and research institutions, hospitals, biotechnology and pharmaceutical companies, and applied laboratories. On March 2, the company announced the closing of its underwritten public offering of two notes totaling $1.2 billion. The company said the proceeds will be used for general corporate purposes, which may include capital expenditures, acquisitions of other companies, or new products or technologies.
    • Walgreens Boots Alliance Inc.: Walgreens Boots Alliance is a global integrated healthcare and retail pharmacy company. The company operates drugstores and provides health services as well as health and beauty products. It also operates a digital healthcare platform.
    • Moderna: Moderna is a biotech company that focuses on RNA therapeutics, primarily mRNA vaccines. It’s only commercial product is the vaccine used to prevent Covid-19. On March 23, the company announced that it making submissions to global regulators for mRNA-1273 for primary vaccination of children six months to under six years of age. In its release, Moderna also announced “positive interim data” from the Phase 2/3 KidCOVE study of the company’s COVID-19 vaccine in children six months to six years. The interim analysis showed a robust neutralizing antibody response.

 

 

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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Healthcare Stocks
Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Pfizer Inc. (PFE) 52.78 295.7 490.0 106.8
Regeneron Pharmaceuticals Inc. (REGN) 680.03 73.8 92.3 104.4
Exelixis Inc. (EXEL) 21.88 6.9 222.2 67.1

Source: YCharts; Pfizer Inc.

    • Pfizer Inc.: Pfizer is a global pharmaceutical company focused on developing treatments and cures for a broad range of diseases. It’s focused on key therapeutic areas, including: internal medicine; oncology; vaccines, inflammation and immunology; and rare disease. On March 23, the company announced positive top-line results from a Phase 3 study of etrasimod, a medication for use in treating moderate to severely active ulcerative colitis, which is an inflammatory bowel disease.
    • Regeneron Pharmaceuticals Inc.: Regeneron Pharmaceuticals is a biotechnology company that develops medicines to treat people with serious diseases, including eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, pain, and more. On March 2, Regeneron failed to persuade a federal judge to throw out a patent infringement lawsuit alleging misuse of a protein to test Regeneron’s breakthrough COVID-19 treatment. The lawsuit was filed by Allele Biotechnology and Pharmaceuticals Inc. U.S. District Judge Philip Halpern said in New York during an oral argument that he could not grant Regeneron’s request at an early stage of the case to find it immune from the two companies’ infringement claims.

 

  • Exelixis Inc.: Exelixis is an oncology-focused biotechnology company. It aims to accelerate the discovery, development, and commercialization of medicines for cancers that are considered difficult to treat.

 

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 (%)
McKesson Corp. (MCK) 310.48 45.5 63.2
Abbvie Inc. (ABBV) 160.28 283.1 62.8
Eli Lilly and Co. (LLY) 289.02 274.0 62.1
Russell 1000 N/A N/A 15.5
Health Care Select Sector SPDR ETF (XLV) N/A N/A 20.3

Source: YCharts

  • McKesson Corp.: McKesson is a global healthcare company offering healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions.
  • Abbvie Inc.: Abbvie is a pharmaceutical company that produces a variety of drugs including Lupron for prostate cancer and Androgel, a testosterone booster. But the company is most known for Humira, an anti-inflammatory medication and one of the world’s best-selling drugs.
  • Eli Lilly and Co.: Eli Lilly is a pharmaceutical company that was the first to mass-produce the polio vaccine and insulin. It’s one of the world’s largest makers of psychiatric drugs such as Prozac, Cymbalta, and Zyprexa.

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