Healthcare stocks have been some of the best performers in the stock market over the past decade. While the overall stock market has more than doubled since 2009, the Healthcare Select Sector SPDR Fund (XLV), which tracks healthcare stocks in the S&P 500, has more than tripled. Healthcare stocks have outperformed the market for a variety of reasons. First, healthcare is one of the few sectors that are largely immune to economic cycles. When the economy weakens, people may cut back on discretionary spending, but they are still going to need healthcare.
Second, healthcare costs have been rising faster than inflation for many years, and this trend shows no signs of abating. As a result, healthcare companies have been able to consistently grow their earnings at a time when many other companies are struggling to maintain their profit margins.
Finally, healthcare stocks tend to be less volatile than the overall market, providing investors with a measure of downside protection. Given these factors, it’s no wonder that healthcare stocks have been such a favorite of investors in recent years. With this in mind, here are two large-cap healthcare stocks for your list right now.
Healthcare Stocks To Buy [Or Avoid] Now
1. UnitedHealth Group (UNH Stock)
Starting off, we have UnitedHealth Group (UNH). In brief, UnitedHealth Group is a diversified health and well-being company. UnitedHealth Group offers a comprehensive portfolio of products and services through two distinct platforms: UnitedHealthcare, which provides healthcare coverage and benefits services; and Optum, which provides information and technology-enabled health services.
UNH Recent Stock News
On Friday, UnitedHealth Group reported its third-quarter 2022 financial results. In them, the healthcare giant reported Q3 2022 earnings of $5.79 per share, with revenue of $80.9 billion. These results came in stronger than analysts expected, which were earnings of $5.45 per share, and revenue estimates of $80.5 billion. What’s more, these revenue figures represent an approximately 12% increase during the same period, a year prior.
Andrew Witty, chief executive officer of UnitedHealth Group said this in the release to shareholders, “The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the health care system and make high-quality care simpler, more accessible and more affordable.“
UNH Stock Chart
So far this year, UNH stock is up 2.16% as of Friday’s closing bell, as shares are trading at $513.13 a share.
2. Eli Lilly & Company (LLY Stock)
Next, let’s dive into Eli Lilly & Co. (LLY). Eli Lilly & Company is a multinational corporation that manufactures and sells pharmaceutical products. The company focuses on areas such as neuroscience, endocrinology, cancer, and immunology.
LLY Recent Stock News
Earlier this month, the company announced it has been approved for U.S. FDA fast-track designation for its treatment tirzepatide. In detail, tirzepatide is a treatment for adults with obesity or overweight with weight-specific comorbidities. For the uninitiated, the FDA gives companies Fast Track designation to help facilitate the treatment development and speed up the review of medicines to treat serious conditions and fill an unmet medical need.
Mike Mason, president of Lilly Diabetes said, “We are pleased with the FDA’s decision to grant Fast Track designation for tirzepatide, and we look forward to completing our rolling submission next year. “Obesity is a chronic disease that impacts the health of nearly 100 million Americans and is a significant driver of healthcare costs.“
LLY Stock Chart
Year-to-date so far Eli Lilly & Co stock has outperformed the broader markets as shares are up over 21% in 2022 so far. Meanwhile, as of Friday’s market close, LLY stock is currently trading at $331.39 a share.