While the 'Magnificent Seven' and AI stocks continue to dominate headlines, the U.S. healthcare sector warrants a closer look for a different reason. The current political uncertainty has compressed valuations, creating an interesting landscape for long-term investors seeking quality at reasonable prices. We present the U.S. healthcare stocks that offer a counterpoint to the hype—balancing solid fundamentals with today's complex market conditions.
The Dow Jones U.S. Health Care Index is a premier benchmark for the American healthcare industry, tracking the performance of the sector’s leading companies. It spans critical industries such as pharmaceuticals, biotechnology, medical equipment, and healthcare providers. Its broad composition gives investors exposure to both established industry titans and dynamic innovators, while its defensive nature supports confidence during periods of economic volatility.
U.S. healthcare stocks stand out now for several reasons. An aging demographic and breakthrough innovations in areas like obesity drugs (GLP-1s) and surgical robotics favors companies that combine reliable cash flows with long-term growth potential. The sector is also navigating a shift in the political landscape regarding healthcare spending which has pushed valuations of many high-quality companies down to attractive levels. Many companies in the Dow Jones U.S. Health Care Index offer resilient business models that are less sensitive to economic cycles, making them attractive building blocks for a balanced portfolio. For investors heavily concentrated in technology, healthcare blue chips deliver strong fundamentals as well as essential sector diversification.
Each month, exclusively for subscribers, Obermatt publishes its Top 10 picks from more than 60 markets using our 360° View, a methodology that balances Value, Growth, Safety, and Sentiment ranks to objectively highlight companies with all-round qualities.
This month’s Dow Jones U.S. Health Care leaders are:
- McKesson is a leading diversified healthcare services and information technology company, supplying pharmaceuticals and medical supplies to pharmacies and hospitals.
- The Cigna Group is a global health service company that combines insurance products with health management and pharmaceutical services through its Evernorth division.
- Cardinal Health is a global distributor of pharmaceuticals and medical products, playing a critical role in the supply chain between manufacturers and healthcare providers.
- Humana is one of the largest health insurance companies in the U.S., with a strong focus on Medicare Advantage plans and integrated care for seniors.
- Elevance Health (formerly Anthem) is a leading health benefits provider in the U.S. and the largest licensee of the Blue Cross Blue Shield Association.
- UnitedHealth Group is a diversified healthcare enterprise and the world's largest insurer by revenue, offering both health benefits and technology-enabled health services (Optum).
- Labcorp operates one of the largest clinical laboratory networks in the world, providing comprehensive diagnostic services and drug development support.
- Quest Diagnostics is the world's leading provider of diagnostic information services and clinical lab tests used by doctors and hospitals for medical decisions.
- Encompass Health is one of the largest providers of post-acute healthcare services in the U.S., operating an extensive network of rehabilitation hospitals.
- Henry Schein is the world's largest provider of health care products and services to office-based dental, medical, and animal health practitioners.
The best opportunities might not be in the U.S.
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