Investors are advised to buy undervalued healthcare stocks with wide economic moats.
Healthcare stocks are appealing to investors for their defensive nature and high demand for health-related products and services. Healthcare companies also invest heavily in research and development, leading to major treatment advancements. In the year to date, the Morningstar Global Healthcare Index fell 6.07%, while the Morningstar Global Market Index gained 2.11%.
The best healthcare stocks to buy now are undervalued and have wide Morningstar Economic Moat Ratings. Companies like Pfizer, Philips, Coloplast, Thermo Fisher Scientific, GSK, West Pharmaceutical Services, Bristol-Myers Squibb, Zimmer Biomet Holdings, Merck & Co., Danaher, Roche, and Bio-Rad Laboratories are among the top picks.
Pfizer is trading 40% below its fair value estimate of $42 per share, offering strong growth potential. The company’s diverse drug portfolio and leading position in the pharmaceutical industry give it a competitive advantage. Pfizer’s focus on innovation and expansion into emerging markets position it for long-term success.
Philips is a leader in imaging and image-guided therapies, with a strong presence in cardiovascular and monitoring areas. The company’s focus on profitability and new management team aim to improve its performance. Philips faces challenges in the sleep care market but is working to rebuild its position and drive growth.
Coloplast is a global leader in ostomy and continence care, with a dominant position in Europe and growth in the US. The company’s consistent innovation and cost structure improvements support its competitive advantage. Coloplast faces competition in the woundcare segment but is well-positioned to compete in the biologic wound care niche.
Thermo Fisher Scientific is a premier life science supplier with a wide economic moat and a diverse product portfolio. The company’s strong position in the biopharma channel and global reach drive its growth potential. Thermo Fisher’s acquisition strategy and focus on innovation position it for long-term success in the diagnostics and research industry.
GSK is one of the largest pharmaceutical firms, with a wide economic moat and diverse product portfolio. The company’s focus on oncology and immunology, along with strategic partnerships, drive its growth potential. GSK’s decision to divest its consumer business is expected to unlock value in the long run.
West Pharmaceutical Services is a key supplier in the pharmaceutical industry, with a wide economic moat and strong market share in injectable therapeutics. The company’s focus on quality and supply chain expertise support its competitive advantage. West Pharmaceutical Services benefits from the growth of the injectables market and stricter regulations in packaging.
Bristol-Myers Squibb is a leading drug manufacturer with a wide economic moat and innovative pipeline. The company’s strategic partnerships and acquisitions drive its growth potential. Bristol-Myers Squibb’s focus on oncology and specialty drugs positions it for long-term success in the healthcare industry.
Zimmer Biomet Holdings is a leader in large-joint reconstruction, with a wide economic moat and strong growth potential. The company’s focus on relationships with orthopedic surgeons and innovative products support its competitive position. Zimmer Biomet Holdings aims to capitalize on the normalization of procedure volume and advancements in surgical technology.
Merck & Co. is a pharmaceutical company with a wide economic moat and strong pipeline of new drugs. The company’s focus on innovative products and strategic acquisitions drive its growth potential. Merck’s strong portfolio of drugs and research and development strategy position it for long-term success in the healthcare industry.
Danaher is an industrial manufacturing company with a wide economic moat and strategic focus on continuous improvement and acquisitions. The company’s strong presence in the diagnostics and research markets supports its growth potential. Danaher’s investment in research and development and operational efficiency drive its success in the healthcare sector.
Roche is a Swiss biopharmaceutical and diagnostic company with a wide economic moat and strong drug portfolio. The company’s focus on biologics and diagnostics drives its competitive advantage. Roche’s innovative pipeline and leading position in the global healthcare market position it for long-term success.
Bio-Rad Laboratories is a medical-device company with a wide economic moat and niche market leadership in clinical diagnostics and life sciences. The company’s focus on diagnostic quality controls and molecular testing supports its growth potential. Bio-Rad Laboratories faces competitive risks in the molecular diagnostics space but is well-positioned for success in clinical diagnostics.
Investors can find more of the best healthcare stocks to buy by reviewing Morningstar’s comprehensive list of healthcare stocks, staying up to date on the healthcare sector’s performance, and using the Morningstar Investor screener to build a shortlist of healthcare stocks to research and watch.
Read more at Morningstar: The Best Healthcare Stocks to Buy