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15 Biggest Healthcare Companies in USA

If you’re seeking to invest in stocks with great long-term potential and are interested in adding some exposure to the healthcare sector, then the 15 biggest healthcare companies in USA are probably your best choice. Generally, the healthcare sector is a good investment because of its strong long-term fundamentals and history shows that healthcare stocks usually register lower declines in periods of market downturns than the broader indexes.

2017 is a good year to invest in healthcare stocks, because while they generally trade at higher valuations than the broader market, the sector is coming off a year in which it declined. The S&P 500 Health Care index declined by 4.40%, compared to a 22% gain by Financials and a 27% increase registered by the S&P 500 Energy. Healthcare stocks declined as the sector became a key issue during the 2016 Presidential campaign, with candidates on both sides promising to address the public’s concerns regarding drug pricing and health insurance. Combined with a rebound in oil prices and the election of Donald Trump in November, it’s easy to see why investors decided to shift towards Financials and Energy stocks and away from Healthcare.

However, since the beginning of the year, the sector has been gaining ground, since the new administration’s efforts to address drug pricing have been limited to empty words and tweets, and the new healthcare bill that is currently working its way through the Senate is expected to highly benefit health insurance companies. Even though Trump has blasted pharmaceutical companies for charging high prices and promised in a tweet to develop “a new system where there will be competition”, he also promised pharma companies that the FDA’s approval process for new drugs would be sped up.

Africa Studio/Shutterstock.com

Africa Studio/Shutterstock.com

Under the new healthcare bill, insurance companies will get big tax cuts and additional federal funding. In addition, states will be able to allow insurers to charge higher rates or deny insurance to people with pre-existing conditions, a rule that is currently part of the Affordable Care Act. And while the so-called “Mainstream Media” is ringing alarm bells that the new bill will lead to 24 million more people being without insurance by 2026 than under the existing law, investors seem to have factored that in and are still happy, as stocks of health insurance companies have soared since the beginning of the year. So, while the new healthcare bill might be mean, especially to old, poor, and sick Americans, it does make health insurers a good investment opportunity.

Now that it’s a bit more clear why the healthcare sector represents an interesting investment, we can take a look at what stocks to chose to invest in. Of course, there are many healthcare-focused ETFs that can provide exposure to a basket of healthcare stocks, but this list of the 15 biggest healthcare companies in USA, which includes several of the 10 largest health insurance companies in America also has many interesting ideas. The companies on the list are taken from the Fortune 500 and are sorted based on their revenue. In addition, we are going to mention what the smart money investors that we track at Insider Monkey as part of our market-beating investment strategy think about the companies in question.

Check out the list beginning on the next page.

15. Amgen, Inc. (NASDAQ:AMGN)

Amgen, Inc. (NASDAQ:AMGN) is a $127 billion biopharmaceutical company that had revenue of nearly $23 billion last year and GAAP EPS of $10.24, with those figures having increased by 6% and 13%, respectively. The company’s best-selling drugs are Enbrel and Neulasta, with sales of $5.97 billion and $4.65 billion, respectively. Amgen, Inc. (NASDAQ:AMGN)’s stock is up by almost 15% since the beginning of the year and there were 64 investors in our database long its shares heading into the second quarter of 2017. For its fiscal 2017, Amgen expects revenue of $22.3 billion to $23.1 billion.

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14. AbbVie Inc (NYSE:ABBV)

AbbVie Inc (NYSE:ABBV) is another biopharmaceutical company, which had sales of $25.56 billion last year (up by 13.3%), mainly driven by its blockbuster drug Humira, which had sales of $16.08 billion. The company’s stock is 16% in the green year-to-date and sports a dividend yield of 3.53%. AbbVie Inc (NYSE:ABBV) was held by 64 funds from our database, which collectively owned roughly $3.40 billion worth of its stock at the end of March. That was up from 54 funds long AbbVie Inc (NYSE:ABBV) a quarter earlier.

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Sergey Nivens/Shutterstock.com

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13. Gilead Sciences, Inc. (NASDAQ:GILD)

In Gilead Sciences, Inc. (NASDAQ:GILD), 71 funds tracked by Insider Monkey held long positions at the end of the first quarter, compared to 85 funds a quarter earlier. Gilead Sciences, Inc. (NASDAQ:GILD)’s 2016 sales amounted to $30 billion, down from $32.15 billion a year earlier. The decline in Gilead Sciences, Inc. (NASDAQ:GILD)’s sales can be attributed to the 16% drop registered in its Antiviral drug sales, which includes HIV and hepatitis C drugs Harvoni and Sovaldi.

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Looker_Studio/Shutterstock.com

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12. CIGNA Corporation (NYSE:CI)

CIGNA Corporation (NYSE:CI) is a $43 billion provider of health insurance and related products and services. The company’s stock has surged by 26% since the beginning of the year and it reported a revenue increase of 5% to $39.7 billion for 2016. CIGNA Corporation (NYSE:CI) currently has over 11 million members, which makes it one of the largest in the U.S. During the first quarter of 2017, the number of investors from our database long CIGNA Corporation (NYSE:CI) grew to 61 from 54.

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11. Merck & Co., Inc. (NYSE:MRK)

Merck & Co., Inc. (NYSE:MRK) is one of the largest pharmaceutical companies in the world and has a market capitalization of $176 billion thanks to a 9% gain year-to-date. The company reported worldwide sales of $39.8 billion for 2016, up by 1%, including a 2% negative impact from currency headwinds. For 2017, Merck & Co., Inc. (NYSE:MRK) expects revenue of between $38.6 billion and $40.1 billion. There were 72 funds tracked by us that were long Merck & Co., Inc. (NYSE:MRK) at the end of March, which makes it the most popular stock in this list.

Merck MRK

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10. Centene Corp (NYSE:CNC)

On the other hand, Centene Corp (NYSE:CNC) is the least popular stock among the 15 biggest healthcare companies in USA, as there are only 41 funds in our database bullish on it as of the end of the first quarter. Shares of Centene Corp (NYSE:CNC), a $14 billion provider of services to government-sponsored healthcare programs, have surged by 42% since the beginning of the year. Centene Corp (NYSE:CNC) saw its revenue jump by 78% to $40.61 billion during 2016.

 Valeri Potapova/Shutterstock.com

Valeri Potapova/Shutterstock.com

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9. HCA Healthcare Inc (NYSE:HCA)

HCA Healthcare Inc (NYSE:HCA)’s stock has advanced by 18% since the beginning of the year. The $32 billion holding company owns and operates hospitals and other healthcare facilities. As of the end of 2016, HCA Healthcare Inc (NYSE:HCA) has over 160 hospitals in the U.S and six hospitals in the UK. The company posted revenue of $41.49 billion for 2016, compared to $39.68 billion for 2015. For 2017, HCA Healthcare Inc (NYSE:HCA) has provided revenue guidance of $43 billion to $44 billion. The number of funds long HCA Healthcare Inc (NYSE:HCA) as of the end of March amounts to 47.

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beerkoff/Shutterstock.com

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8. Pfizer Inc. (NYSE:PFE)

Then there’s Pfizer Inc. (NYSE:PFE), the $203 billion New York-based pharmaceutical company. Pfizer Inc. (NYSE:PFE)’s shares have inched up by 4% since the beginning of the year and currently have a dividend yield of 3.75%. In 2016, the pharma giant generated revenue of $52.8 billion, up by 11%. Between January and March, the number of investors from our database bullish on Pfizer Inc. (NYSE:PFE) fell by ten to 72.

Pfizer PFE pharmaceutical stock

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7. Humana Inc (NYSE:HUM)

Humana Inc (NYSE:HUM) is another large provider of health insurance in the U.S, with a membership count of over 10 million people. The company’s stock is up by 17% year-to-date. Humana Inc (NYSE:HUM) posted 2016 revenue of $54.38 billion. There were 64 funds tracked by Insider Monkey long Humana Inc (NYSE:HUM) at the end of March.

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6. Aetna Inc (NYSE:AET)

Aetna Inc (NYSE:AET), a $50.74 billion health insurance company, reported revenue of $63.05 billion for 2016, up by 5% compared to 2015. The company’s stock has appreciated by 23% since the beginning of the year. Aetna Inc (NYSE:AET) currently has over 23 million medical members. At the end of the first quarter of 2017, 68 investors held shares of Aetna Inc (NYSE:AET), down by eight over the quarter.

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5. Johnson & Johnson (NYSE:JNJ)

With a market cap of $359 billion, Johnson & Johnson (NYSE:JNJ) is one of the most valuable pharmaceutical companies in the world. Its stock is up by 15% year-to-date and has a dividend yield of 2.50%. Johnson & Johnson (NYSE:JNJ) is also a dividend king, having increased its dividends for 55 consecutive years. For 2016, Johnson & Johnson (NYSE:JNJ) reported sales of $71.9 billion, up by 2.6%. The number of funds from our database with stakes in Johnson & Johnson (NYSE:JNJ) declined by six to 70 during the first three months of 2017.

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4. Anthem Inc (NYSE:ANTM)

Anthem Inc (NYSE:ANTM) is the fourth-largest healthcare company, having registered revenue of $84.19 billion in 2016. The $51 billion provider of health insurance has seen its stock advance by 32% since January 3. For 2016, Anthem Inc (NYSE:ANTM) also reported an increase in medical enrollments of 1.3 million to 39.9 million members. A total of 61 investors that we follow disclosed long positions in Anthem Inc (NYSE:ANTM) in the latest round of 13F filings.

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Jonathan Weiss/Shutterstock.com

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3. Express Scripts Holding Company (NASDAQ:ESRX)

Express Scripts Holding Company (NASDAQ:ESRX) is the largest pharmacy benefit management company in the U.S, with revenue of $100.29 billion reported for 2016. There were 54 funds in our database long Express Scripts Holding Company (NASDAQ:ESRX) at the end of March, versus 49 funds a quarter earlier. The company’s stock is down by 7% year-to-date, primarily due to lower-than-expected revenue reported for the first quarter. Express Scripts Holding Company (NASDAQ:ESRX)’s first-quarter revenue of $24.70 billion inched down by 0.4% on the year and missed the consensus estimate by $290 million.

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Stokkete/Shutterstock.com

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2. CVS Health Corp (NYSE:CVS)

CVS Health Corp (NYSE:CVS) is an $82.30 billion integrated pharmacy company, which operates pharmacies and provides pharmacy benefit management services. Its stock has edged up by 2% since the beginning of 2017 and sports a dividend yield of 2.50%. In 2016, CVS Health Corp (NYSE:CVS)’s revenue jumped by 16% to $177.50 billion, driven by 19.5% growth in its Pharmacies Services Segment and 12.6% in its Retail segment. At the end of the first quarter, 52 investors tracked by Insider Monkey held shares of CVS Health Corp (NYSE:CVS), down by seven over the quarter.

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adriaticfoto/Shutterstock.com

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1. UnitedHealth Group Inc (NYSE:UNH)

Finally, on the top spot in the list of the 15 biggest healthcare companies in USA is UnitedHealth Group Inc (NYSE:UNH), the largest health insurer in the country. The company delivered revenue of over $185 billion in 2016, an increase of 18% over the year, ranking it sixth among Fortune 500 companies. UnitedHealth Group Inc (NYSE:UNH)’s stock has advanced by almost 17% year-to-date and the company serves around 49 million people. The number of funds from our database long UnitedHealth Group Inc (NYSE:UNH) amounts to 71 as of the end of March.

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Ken Wolter/Shutterstock.com

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Disclosure: None

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