3 Healthcare Stocks to Buy Now: June 2024

Stocks to buy

Healthcare stocks offer a haven for investors amidst the uncertainty.

The Fed elected to hold interest rates at a 23-year high between 5.25% and 5.5% to combat persistent inflation. According to the Fed, the current economic outlook remains uncertain, and the Committee remains alert to inflationary headwinds.

Additionally, a recent BlackRock report highlights that U.S. healthcare stocks have impressively outshone the broader market by an average of 10% across the last seven recessions.

That said, the article covers three of the best healthcare stocks to buy now. These businesses stand out for their innovative product pipelines and strong market positions in medical technology. Moreover, each company is poised for robust growth through tech advancements, enhancing its potential for greater market share and stronger profitability.

Hence, now more than ever, healthcare stocks represent resilient picks for those facing economic uncertainty.

Healthcare Stocks to Buy Now: Medtronic (MDT)

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Medtronic (NYSE:MDT) is a standout pick in MedTech, balancing stability with growth opportunities. Though it hasn’t been the biggest wealth compounder, it continues to shine with its storied history in its niche and a solid dividend profile. Its rewarding dividend yield, exceeding 3.5%, has been sustained for over a decade. Moreover, with north of $12.2 billion in free cash flows, it has enough in the tank to continue growing its payouts.

MDT distinguishes itself as a top pure-play medical device maker with multiple products to boot. It stands tall, particularly in diabetes care, witnessing a massive turnaround after hitting a four-year low of $2.34 billion in fiscal year (FY) 2022. In its FY 2024 fourth-quarter (Q4), quarterly diabetes revenues were at $660 million, an 11% increase from the prior-year quarter. Its Q4 report maintained its form following a third-quarter (Q3) surge, with sales rocketing 12.3% to $640 million.

Moreover, under the dynamic leadership of CEO Geoff Martha, MDT is looking to pioneer the strategic integration of AI in healthcare. The goal is to significantly enhance clinical decision-making while fostering the development of new treatment indicators. Overall, this innovative edge presents a compelling case for investing in MDT stock.

Kenvue (KVUE)

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Kenvue (NYSE:KVUE), born from healthcare juggernaut Johnson & Johnson (NYSE:JNJ) a couple of years ago, is now the largest pure-play consumer health company by revenue. With revenues exceeding the $15 billion mark, Kenvue boasts a lineup of timeless consumer health brands such as Tylenol, Listerine, and Band-Aid. These brands flaunt inelastic demand, maintaining their robust positioning amid soaring inflation.

Its most recent quarter saw a relatively modest 1.1% increase in first-quarter (Q1) sales to $3.9 billion. Sales volumes were down, but a lot of it can be attributed to last year’s inventory build-up.

Like MDT, Kenvue stock has also been a lackluster wealth compounder. However, it continues to attract investors for its impressive dividend profile, yielding over 4.3%.  Hence, for investors on the lookout for a compelling, defensive, recession-proof investment, look no further than KVUE stock. Also, the stock trades at 2.21 times forward sales estimates and 2.7 times its forward enterprise value.

Intuitive Surgical (ISRG)

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Intuitive Surgical (NASDAQ:ISRG) is a forerunner in robotic-assisted surgery with its pioneering da Vinci Surgical Systems. These systems have proven revolutionary in healthcare and facilitate over 13 million procedures.

ISRG has been on an excellent growth trajectory, witnessing a strong uptick in system placements, installing 1,370 units, up from 1,264 the previous year. Moreover, in Q1, the company posted stellar revenues, reaching a mighty impressive $1.9 billion, marking an 11% bump from the prior-year period. This surge is linked to a 16% global increase in da Vinci procedures, reflecting a superb rebound from the pandemic-led slowdown and a cleared backlog.

Moreover, its Q1 net income jumped impressively by $547.4 million, up from $360.8 million in the same period last year. These figures comfortably beat analyst expectations on both top and bottom lines while signaling a bright future for ISRG as it continues to innovate and expand its clinical applications. Also, unlike others on the list, ISRG stock has been a tremendous wealth compounder. It’s up 157% in the past five years and more than 30% in the past year.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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