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12 Best Healthcare Dividend Stocks To Buy Now

In this article, we discuss 12 best healthcare dividend stocks to buy now. You can skip our detailed analysis of the healthcare sector and the past performance of dividend stocks, and go directly to read 5 Best Healthcare Dividend Stocks To Buy Now

Over the span of almost four years, the COVID-19 pandemic brought about significant changes within the US healthcare system’s structure and operations. Specifically, the period between 2020 and 2021 posed substantial challenges for both payers and providers. Despite these difficulties, there was an uninterrupted momentum of innovation and expansion within healthcare services. Innovation remained a driving force, leading to the introduction of new technologies, telemedicine expansion, and novel treatment approaches. These advancements and innovations have left analysts feeling optimistic about its future prospects. Portfolio Managers at Janus Henderson Investors, Andy Acker and Dan Lyons are optimistic about this situation, suggesting it sets the stage for a promising outlook in the healthcare sector. They mentioned that healthcare is heading into the new year with lower valuations after a period of underperformance. At the same time, there’s a surge in innovation, and the effects of post-COVID adjustments are slowing down.

Don’t Miss: 20 Most Valuable Healthcare Companies in the World

The Janus Henderson report mentioned that in the biotech industry, numerous stocks are selling at larger discounts than ever before. Small and mid-sized biotech company stocks experienced significant drops in value in 2021 and 2022. This decline happened as long-term growth investments, including biotech, were affected by the increase in 10-year Treasury bond yields during 2023. The report further highlighted that the S&P Biotechnology Industry Index, which measures the performance of big biotech companies within the S&P 500 Index, is currently trading at almost a 25% lower value compared to its average over the past 30 years. Additionally, the count of early-stage biotech companies trading at a value less than the cash they hold reached an all-time high in October.

Healthcare spending in the US has historically been one of the highest among developed countries. This spending covered various aspects of healthcare, including hospital care, physician services, prescription drugs, medical equipment, and more. According to a report by The Economist, the country allocates around $4.3 trillion annually to ensure its citizens’ well-being, which represents approximately 17% of its GDP. This spending is double what other wealthy countries typically put towards healthcare. The report further mentioned that in 2022, the total earnings of the nine largest intermediaries, known as “big health,” reached about 45% of the US healthcare expenses, significantly increasing from 25% in 2013. These big health companies make up eight out of the top 25 revenue-generating firms in the S&P 500 index, while big tech comprises four, and big pharma doesn’t hold any spots among these top companies.

In 2023 so far, healthcare stocks have reported their poorest performance compared to the broader market in about 25 years. This is due to the emergence of a new group of weight-loss medications that might change the market dynamics for several profitable treatments already in existence. The S&P 500 Healthcare Index, which tracks the performance of UnitedHealth Group Incorporated (NYSE:UNH), Eli Lilly and Company (NYSE:LLY), and Merck & Co. Inc. (NYSE:MRK) is down by 3.14% year-to-date, compared with a 19.3% return of the S&P 500. In view of these arguments, we will discuss some of the best dividend stocks from the healthcare sector.

Our Methodology:

For this list, we scanned Insider Monkey’s database of Q3 2023 and picked healthcare dividend companies. From that list, we chose healthcare stocks with a strong track record of paying dividends to shareholders, which makes them resilient in the current environment. The stocks are ranked in ascending order of the hedge fund investors owning stakes in them, according to Insider Monkey’s database of Q3 2023.

12. Bristol-Myers Squibb Company (NYSE:BMY)

Number of Hedge Fund Holders: 65

Bristol-Myers Squibb Company (NYSE:BMY) is a pharmaceutical company known for its development and production of prescription drugs and biologics. The company currently pays a quarterly dividend of $0.57 per share and has a dividend yield of 4.56%, as of December 5. It is one of the best dividend stocks on our list as the company has been raising dividends consistently for the past 17 years.

At the end of Q3 2023, 65 hedge funds in Insider Monkey’s database reported having stakes in Bristol-Myers Squibb Company (NYSE:BMY), compared with 66 in the previous quarter. The collective value of these stakes is over $1.8 billion. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder in Q3.

11. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 69

Abbott Laboratories (NYSE:ABT) is a diversified global healthcare company that operates in several segments. The company provides solutions for healthcare professionals to diagnose and monitor various medical conditions. On September 21, the company declared a quarterly dividend of $0.51 per share, which was in line with its previous dividend. It maintains a 51-year streak of consistent dividend growth, which makes ABT one of the best dividend stocks on our list. The stock’s dividend yield on December 5 came in at 1.94%.

The number of hedge funds tracked by Insider Monkey owning stakes in Abbott Laboratories (NYSE:ABT) grew to 69 in Q3 2023, from 62 in the previous quarter. The consolidated value of these stakes is over $2.2 billion.

10. HCA Healthcare, Inc. (NYSE:HCA)

Number of Hedge Fund Holders: 71

HCA Healthcare, Inc. (NYSE:HCA) is an American leading healthcare services provider that owns and operates a vast network of hospitals across the country. The company offers a quarterly dividend of $0.60 per share and has a dividend yield of 0.93%, as of December 5.

In the third quarter of 2023, HCA Healthcare, Inc. (NYSE:HCA) reported revenue of $16.2 billion, which showed an 8.3% growth from the same period last year. The company’s operating cash flow for the quarter came in at nearly $2.5 billion. It ended the quarter with over $891 million available in cash and cash equivalents.

As of the close of Q3 2023, 71 hedge funds in Insider Monkey’s database owned stakes in HCA Healthcare, Inc. (NYSE:HCA), growing from 66 in the preceding quarter. The total value of these stakes is roughly $2 billion. With over 4.5 million shares, First Eagle Investment Management was the company’s leading stakeholder in Q3.

9. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 73

Pfizer Inc. (NYSE:PFE) is an American biotech and pharmaceutical company. On October 4, the company announced a quarterly dividend of $0.41 per share, which fell in line with its previous dividend. The company raised its dividends consistently for the past 13 years, which makes PFE one of the best dividend stocks on our list. In addition to this, it also returned nearly $7 billion to shareholders through dividends during the quarter.

Pfizer Inc. (NYSE:PFE) was a part of 73 hedge fund portfolios at the end of Q3 2023, which remained unchanged from the previous quarter, as per Insider Monkey’s database. The consolidated value of these stakes is more than $2.43 billion.

8. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 73

AbbVie Inc. (NYSE:ABBV) is a pharmaceutical company known for its focus on developing and marketing drugs for various therapeutic areas, with a particular emphasis on immunology and oncology. The company holds a 51-year streak of consistent dividend growth, which makes ABBV one of the best dividend stocks on our list. The stock has a dividend yield of 4.30%, as of December 5.

As of the end of the third quarter of 2023, 73 hedge funds in Insider Monkey’s database owned stakes in AbbVie Inc. (NYSE:ABBV), down slightly from 74 in the preceding quarter. These stakes are collectively valued at over $3.2 billion. With nearly 4 million shares, Marshall Wace LLP was the company’s leading stakeholder in Q3.

7. The Cigna Group (NYSE:CI)

Number of Hedge Fund Holders: 74

The Cigna Group (NYSE:CI) is a global health services organization that operates in various segments within the healthcare industry. In the third quarter of 2023, the company reported revenue of $49 billion, up 8.2% from the same period last year. It posted the shareholders’ net income of $1.4 billion for the quarter or $4.74 per share.

The Cigna Group (NYSE:CI), one of the best dividend stocks on our list, currently pays a quarterly dividend of $1.23 per share. The company has raised its payouts for three consecutive years. As of December 5, the stock has a dividend yield of 1.87%.

At the end of September 2023, 74 hedge funds tracked by Insider Monkey owned investments in The Cigna Group (NYSE:CI), the same as in the previous quarter. The collective value of these stakes is over $2.84 billion.

6. Elevance Health, Inc. (NYSE:ELV)

Number of Hedge Fund Holders: 83

Previously known as Anthem, Elevance Health, Inc. (NYSE:ELV) is an Indiana-based health insurance company. The company offers a quarterly dividend of $1.48 per share and has a dividend yield of 1.23%, as of December 5. During its most recent quarter, the company distributed $348 million to shareholders through dividends, which makes ELV one of the best dividend stocks on our list.

As of the end of Q3 2023, 83 hedge funds in Insider Monkey’s database owned stakes in Elevance Health, Inc. (NYSE:ELV), up from 82 in the previous quarter. The collective value of these stakes is over $5.2 billion. Among these hedge funds, First Eagle Investment Management was the company’s leading stakeholder in Q3.

Click to continue reading and see 5 Best Healthcare Dividend Stocks To Buy Now

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Disclosure. None. 12 Best Healthcare Dividend Stocks To Buy Now is originally published on Insider Monkey.

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The “Toll Booth” Operator of the AI Energy Boom

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The Hedge Fund Secret That’s Starting to Leak Out

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A New Dawn is Coming to U.S. Stocks

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Should I put my money in Artificial Intelligence?

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Click to continue reading…