The 4 Best Healthcare Sector Stocks to Buy

If you’ve ever received a hospital bill then you know it’s no secret that the healthcare sector is lucrative. To be precise, the Centers for Medicare and Medicaid Services expect U.S. healthcare spending to reach $6.2 trillion by 2028. Additionally, in the wake of the COVID-19 pandemic, there is a renewed interest in public health. All of this is good news for healthcare stock investors. In the U.S., the healthcare sector is comprised of companies that manufacture and sell drugs and medical equipment. It also includes hospitals, healthcare providers and health insurance companies. With that in mind, let’s examine four of the best healthcare sector stocks to buy.

Top Healthcare Sector Stocks to Invest In

No. 4 Moderna (Nasdaq: MRNA)

Most investors recognize Moderna as one of the best healthcare stocks to buy thanks to its COVID-19 vaccine. Moderna was one of just three companies to offer a COVID-19 vaccine, alongside Pfizer and Johnson & Johnson. However, there’s something unique about Moderna that separates it from the other two. To develop its COVID-19 vaccine, Moderna used an entirely new process. It leveraged the use of mRNA to “teach” human cells to fight COVID-19. Moderna is currently one of the only companies using this type of strategy.

COVID-19 was a massive breakthrough for Moderna. Up until then, it had no real evidence that its system could work. It also had lots of expenses with very little revenue. But, post vaccine approval, Moderna brought in nearly $19 billion in revenue in 2021. Even more importantly, Moderna gained proof of concept.

Now that Moderna has used mRNA to treat one disease, it can surely expand its technology. In fact, it currently has 31 new vaccines in development. If just a fraction of these new vaccines are approved, it could dramatically increase Moderna’s bottom line.

Moderna recently reported Q2 2022 revenue of $4.8 billion and a net income of $2.2 billion. These numbers were up 9% and down 21% YoY respectively. Almost all of this income still came from its COVID-19 vaccine. But, watch out for this to change in the coming years.

Moderna went public in 2019 and its stock is up over 500% since then. But, it’s down just under 50% so far this year.

No. 3 UnitedHealth Group (NYSE: UNH)

Most investors consider UnitedHealth Group one of the best healthcare sector stocks to buy. This is because UnitedHealth Group is a goliath in the industry. It is currently the nation’s largest health insurance provider. In 2021, it reported annual revenue of $287.6 billion and a net income of $17.29 billion. This was enough for Fortune to rank it as the 5th largest company in America.

UnitedHealth Group also owns Optum, a pharmacy benefit manager and healthcare provider. Optum represents a growth opportunity for UnitedHealth Group. In Q1, Optum reported revenue of $43.3 billion. Notably, its revenue per customer increased 33% YoY. It also raised its guidance for the rest of the year and now expects to serve 600,000 customers (up from an earlier projection of 500,000).

Overall, UnitedHealth Group reported Q2 2022 revenue of $80.3 billion, up 13% YoY. Total net income was $5.07 billion, up 19% YoY. Additionally, UnitedHealth Group has a dividend yield of 1.27%. This stock is up 3% so far this year and is up 170% over the past five years.