Retirement Stock Portfolio: 12 Healthcare Stocks To Consider

Published January 20, 2024 at 2:31 am EST Updated September 7, 2026 at 12:15 pm EDT

In this article, we discuss the 12 healthcare stock options to add to your retirement portfolio.

Globally, retirees are exploring investment opportunities to supplement their income, driven by the highest inflation recorded in nearly four decades. In response to this concern, the Social Security Administration addressed the issue by announcing an 8.7% increase in benefits earlier in 2023 to mitigate the impact of inflation, as reported by Bloomberg. With this adjustment, the average retiree benefit reached $1,827 per month, marking a $146 increase from the year 2022. However, given the average annual household expenses for individuals aged 65-74 amounting to approximately $53,000, these social security benefits fall short of adequately covering living costs.

In times of economic challenges, investors, particularly those looking forward to a secure retirement, tend to lean towards low-risk stocks that offer reasonable returns amid heightened uncertainties. Consequently, healthcare and consumer stocks often become the preferred choices when navigating significant macroeconomic headwinds. The healthcare industry has undergone profound changes, particularly in the aftermath of the pandemic. Advances in medical technology, pharmaceuticals, and treatment methodologies have brought about a revolution in patient care and outcomes.

The healthcare sector includes a broad spectrum of companies, covering pharmaceuticals, manufacturers of medical equipment and devices, providers of medical insurance, and various other healthcare services. Due to the diverse range of services offered, which frequently contribute to higher life expectancy and enhanced quality of life, the healthcare sector plays a substantial role in the global economic landscape. According to a recent report by Bloomberg, government data highlights that health spending in the US is anticipated to reach nearly $7.2 trillion by 2031. This spending is projected to grow at a faster rate than the overall economy in the coming years. Healthcare expenses are expected to constitute 19.6% of the country’s total economic output (GDP), up from 18.3% in 2021. In addition, the industry is expected to witness a 12.8% increase in earnings in 2024, slightly surpassing the 11.8% growth anticipated for the S&P 500. This growth is fueled, in part, by an elevated demand for products such as obesity drugs.

Pharmaceutical companies, an extension of the overall healthcare industry, are commonly categorized as defensive, given their role in producing essential health maintenance and illness treatment products. The demand for these products tends to remain relatively stable, even during economic downturns. Notably, the sector provided favorable returns to investors in 2022, marked by the S&P 500’s weakest annual performance since 2008. From December 2021 to December 2022, the NYSE Arca Pharmaceutical Index recorded a gain of 4.91%, contrasting sharply with the S&P 500’s significant 19.4% decline. Over the past 5 years, the index has shown an increase of 67.48%. With that in mind, some of the best healthcare stocks to buy for a retirement stock portfolio include the likes of Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), and Johnson & Johnson (NYSE:JNJ), among others listed below.

Retirement Stock Portfolio: 12 Healthcare Stocks To Consider

A healthcare professional in full protective gear performing a medical procedure.

Our Methodology

For our list of the 12 best healthcare stocks to consider for a retirement stock portfolio, we used a stock screener to come up with a list of stocks with a beta value of less than 1. We further narrowed down this list to include healthcare stocks that have a notable history of paying dividends to investors. Their dividend growth histories make them suitable options for retiree investors who seek to generate stable income. In addition to this, the hedge fund sentiment was measured using data from 910 hedge funds tracked by Insider Monkey in Q3 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

12. McKesson Corporation (NYSE:MCK)

Number of Hedge Fund Holders: 58

Headquartered in the United States, McKesson Corporation (NYSE:MCK) specializes in pharmaceutical distribution and offers health information technology, medical supplies, and care management solutions. Notably, the company supplies one-third of all pharmaceuticals used in North America and maintains a workforce exceeding 78,000 employees. As of January 8, the company pays a quarterly dividend of $0.63 per share, resulting in a dividend yield of 0.52%.

In Q3 2023, the number of hedge funds tracked by Insider Monkey owning stakes in McKesson Corporation stood at 58, a slight decline from the previous quarter. The consolidated value of these stakes is over $2.95 billion.

Baron Health Care Fund made the following comment about McKesson Corporation in its Q3 2023 investor letter:

“Partially offsetting the above was favorable stock selection in pharmaceuticals and health care distributors along with cash exposure in a declining market. Strength in pharmaceuticals and health care distributors was driven by gains from Lilly and McKesson Corporation (NYSE:MCK). McKesson’s stock performed well due to strong financial results in the company’s pharmaceutical distribution and prescription technology solutions businesses, driven in part by higher volumes of GLP-1 medicines and prior authorization technology services related to GLP-1 medicines.”

Much like Pfizer Inc., Eli Lilly and Company, and Johnson & Johnson, McKesson Corporation ranks among top-rated healthcare stocks that are suitable for a retirement stock portfolio.

11. Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 60

Amgen Inc. (NASDAQ:AMGN) is a global biopharmaceutical company engaged in the research, development, manufacturing, and distribution of human therapeutics. Recognized as one of the notable healthcare stocks for a retirement stock portfolio, the company focuses on key areas such as oncology/hematology, inflammation, bone health, cardiovascular diseases, nephrology, and neuroscience. As of January 8, Amgen Inc. offers a quarterly dividend of $2.25 per share, resulting in a dividend yield of 2.92%, making it a decent candidate for a retirement stock portfolio.

In Q3 2023, the number of hedge funds tracked by Insider Monkey reporting stakes in Amgen Inc. stood at 60, marking an increase from the previous quarter’s 57. The consolidated value of these stakes is over $2.16 billion.

Aristotle Capital Value Equity Strategy made the following comment about Amgen Inc. in its Q3 2023 investor letter:

“Amgen Inc. (NASDAQ:AMGN), the biopharmaceutical company, was the top contributor for the quarter. The company continues to leverage its innovative platform to strengthen its product portfolio, offset maturing products, such as Epogen and Neulasta, and increase market share. Over the past year, Amgen has reported double‐digit volume growth, operating margin expansion to over 40% and record levels of sales for cholesterol drug Repatha, bone‐strengthening drug Prolia and cancer drug Blincyto. Additionally, the company remains well positioned to benefit from the continued development and commercialization of biosimilars such as Amgevita, the first biosimilar to Humira, and the successful integration of Otezla to bolster its inflammation segment. Lastly, the FTC agreed to allow Amgen to proceed with its $27.8 billion acquisition of Horizon Therapeutics. We note that this is yet another unsuccessful attempt by the FTC to block an M&A transaction of one of our holdings (see below re: Activision Blizzard). The transaction closed on October 6, 2023 and brings expertise in rare disease therapies (including bulging eye‐drug Tepezza), as well as adds to Amgen’s immunology portfolio.”

10. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 64

CVS Health Corporation (NYSE:CVS) stands as a prominent healthcare entity overseeing an extensive network of retail pharmacies and clinics across the nation. The organization operates under various brands, including CVS Pharmacy (a retail pharmacy chain), CVS Caremark (a pharmacy benefits manager), and Aetna (a health insurance provider).

During the third quarter, CVS Corporation achieved sales of $89.76 billion, reflecting an almost 11% increase from the corresponding period in the previous year. The company also reported a net income of $2.27 billion, or $1.75 per share, for the quarter. This marked a significant turnaround from the net loss of $3.40 billion, or $2.59 per share, reported for the same period a year ago.

As of the conclusion of the third quarter in 2023, data from Insider Monkey’s database, which monitors 910 hedge funds, indicated that 64 hedge funds had positions in CVS Health Corporation. Notably, Two Sigma Advisors, led by John Overdeck and David Siegel, emerged as a significant investor with a substantial stake in the company valued at $344.87 million.

ClearBridge Sustainability Leaders Strategy made the following comment about CVS Health Corporation in its Q3 2023 investor letter:

“Other health care holdings such as managed care company UnitedHealth Group and health care services company CVS Health Corporation (NYSE:CVS) were also rewarded in the third quarter. CVS, though a marginal contributor, has been weighed down in 2023 by an acquisition deal for Oak Street Health, an increase in medical benefits costs and a decline in the company’s overall Medicare Advantage star rating, but recent operational improvements suggest progress in its transition from a retailer to a diversified health care services company. Oak Street Health is a potential foundational asset for CVS’s retail primary care strategy, and we are positive on the company’s long-term prospects.”

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

Number of Hedge Fund Holders: 65

Bristol-Myers Squibb Company (NYSE:BMY) operates as a global biopharmaceutical firm, engaging in various facets of the biopharmaceutical industry, which includes research, development, licensing, manufacturing, marketing, and distribution of biopharmaceutical products. These products are designed to address a broad spectrum of medical conditions, covering hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases.

On December 27, Geoff Meacham at Bank of America Securities maintained a Buy rating and a $68 price target on shares of Bristol-Myers Squibb Company.

As of the conclusion of the third quarter this year, Bristol-Myers Squibb Company attracted investments from 65 out of the 910 hedge funds examined in Insider Monkey’s research.

RGA Investment Advisors made the following comment about Bristol-Myers Squibb Company in its Q3 2022 investor letter:

“Bristol-Myers Squibb Company, which we referenced above, boasts a double digit free cash flow yield that gets divided roughly equally between repurchases, a dividend and M&A in what is the best environment for acquisitions perhaps ever. In 2019, BMY acquired Celgene, who had one of the better corporate development programs in the industry. We view this as a great outlet for us as generalists considering a company like BMY should truly thrive with the ability to acquire outstanding assets and science at depressed valuations. We touched on the Turning Point acquisition above and we expect the company to be increasingly active in the M&A landscape. Importantly, Celgene also came to BMY with a phenomenal CAR-T platform. CAR-T is a cell therapy that activates the body’s immune system to target cancers. This will be a key growth vector alongside M&A in overcoming the company’s patent cliff.”

8. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 69

Headquartered in Abbott Park, Illinois, United States, Abbott Laboratories (NYSE:ABT) is a multinational medical devices and healthcare company with a diverse product portfolio that includes Pedialyte, Similac, BinaxNOW, Ensure, Glucerna, ZonePerfect, FreeStyle Libre, i-STAT, and MitraClip.

In the third quarter, Abbott Laboratories reported a 2.5% year-over-year (YoY) decline in revenues, totaling $10.14 billion, surpassing estimates by $320 million. Despite this decline, the company exceeded the anticipated earnings per share (EPS) of $1.10, posting a non-GAAP EPS of $1.14.

As of Q3 2023, 69 out of the 910 hedge funds tracked by Insider Monkey owned shares of Abbott Laboratories. Among the leading hedge fund shareholders was Ric Dillon’s Diamond Hill Capital with ownership of 5.06 million shares valued at $490.45 million.

7. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 73

AbbVie Inc. (NYSE:ABBV) operates as a specialized biopharmaceutical company dedicated to the research, development, manufacturing, and distribution of medications designed for chronic and complex illnesses. The company is particularly known for its flagship drug, Humira, which is a crucial treatment for conditions such as moderate-to-severe rheumatoid arthritis and Crohn’s disease.

With an impressive 50-year streak of continuous dividend growth, the American pharmaceutical giant currently boasts a dividend yield of 3.84% as of January 8.

As of the close of the third quarter in 2023, Insider Monkey’s database, monitoring 910 hedge funds, indicated 73 holdings in AbbVie Inc., marking a slight decrease from the 74 hedge funds in the previous quarter. The collective value of these holdings surpasses $3.27 billion.

AbbVie Inc. joins the ranks of Pfizer Inc., Eli Lilly and Company, and Johnson & Johnson as one of the best healthcare stocks for a retirement stock portfolio.

6. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 73

Established in 1849 by German entrepreneurs Charles Pfizer and Charles F. Erhart, Pfizer Inc. stands as a renowned multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan, New York City. Globally recognized for its substantial contributions to medical research, development, and production, Pfizer operates across various medical fields, including immunology, oncology, cardiology, endocrinology, and neurology. In 2022, Pfizer Inc. achieved remarkable success with its COVID-19 vaccine Comirnaty, generating an impressive $37.8 billion in alliance revenues and direct sales.

As of the conclusion of Q3 2023, data from Insider Monkey’s database revealed that 73 hedge funds maintained stakes in Pfizer Inc., a figure unchanged from the previous quarter. The combined value of these stakes exceeds $2.4 billion.

5. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 84

Founded in 1886, Johnson & Johnson is an American multinational corporation renowned for its advancements in medical devices, pharmaceuticals, and consumer packaged goods. Notably, the company’s pharmaceutical division has maintained an impressive track record of dividend growth for over 62 years. As of January 8, Johnson & Johnson offers a quarterly dividend of $1.19 per share, resulting in a dividend yield of 2.95%.

On October 17, Johnson & Johnson reported adjusted earnings and revenue that exceeded Wall Street’s forecasts, subsequently raising its full-year guidance due to robust sales in both its pharmaceutical and medical devices divisions. The pharmaceutical company also disclosed net income of $4.31 billion, equivalent to $1.69 per share. This figure remained consistent with the net income of $4.31 billion, or $1.62 per share, reported for the corresponding period in the previous year.

In the third quarter of 2023, the number of hedge funds tracked by Insider Monkey with holdings in Johnson & Johnson declined to 84, down from 88 in the prior quarter. The collective investments by these hedge funds surpass a total value of $4.15 billion. A leading hedge fund investor in Johnson & Johnson is Bridgewater Associates, managed by Ray Dalio, with a substantial stake valued at approximately $424.3 million.

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

Number of Hedge Fund Holders: 85

Merck & Co., Inc., a distinguished American multinational pharmaceutical company headquartered in Rahway, New Jersey, has roots dating back to the Merck Group, established in Germany in 1668. Originally the American arm of this venerable group, the company operates under the names Merck Sharp & Dohme or MSD outside the United States and Canada. It holds a prominent position in the pharmaceutical industry, specializing in the development of medicines, vaccines, biologic therapies, and animal health products.

Showcasing a consistent pattern of dividend growth for 11 consecutive years, the company currently provides a quarterly dividend of $0.77 per share, resulting in a dividend yield of 2.62% as of January 8.

Insider Monkey sifted through 910 hedge funds for their third-quarter 2023 investments, revealing that 85 had invested in Merck & Co., Inc., up from 78 in the previous quarter.

3. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 102

Founded in 1876, Eli Lilly and Company is an American pharmaceutical enterprise headquartered in Indianapolis, Indiana, with a global presence spanning 18 other countries. The company is named after its founder, Colonel Eli Lilly, a pharmaceutical chemist and a veteran of the American Civil War.

Eli Lilly and Company currently pays a quarterly dividend of $1.30 per share and has exhibited a steady pattern of dividend growth for the past ten consecutive years. Impressively, the company has been providing uninterrupted dividends to shareholders for 138 years. As of January 8, the stock offers a dividend yield of 0.83%.

In Q3 2023, the number of hedge funds holding stakes in Eli Lilly and Company increased to 102, up from 87 in the previous quarter, as per data from Insider Monkey’s database, which tracks 910 hedge funds. The combined value of these stakes surpasses $9 billion.

2. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 103

Established in 1984 by brothers Steven and Mitchell Rales, Danaher Corporation (NYSE:DHR) stands as a diversified American conglomerate with a global footprint. Headquartered in Washington, D.C., the company specializes in the design, manufacturing, and marketing of medical, industrial, and commercial products and services. Danaher Corporation operates through three distinct segments: Life Sciences, Diagnostics, and Environmental & Applied Solutions.

Danaher Corporation released its Q3 2023 earnings report on October 24, 2023, revealing a net earnings figure of $1.1 billion, equivalent to $1.51 per diluted common share. Despite encountering a 10.5% year-over-year decline in revenues, totaling $6.9 billion, the company surpassed expectations in earnings, showcasing resilience in a challenging operating environment.

As of September 2023, 103 out of the 910 hedge funds surveyed by Insider Monkey had purchased shares of the firm.

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 104

Headquartered in Minnetonka, Minnesota, UnitedHealth Group Incorporated (NYSE:UNH) stands as a leading American multinational corporation specializing in managed healthcare and insurance services, operating as a for-profit entity. The corporation is structured into four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. Recognized as one of the best healthcare stocks available, UnitedHealth Group Incorporated offers a quarterly dividend of $1.88 per share on January 8.

Insider Monkey’s database of 910 hedge funds reveals that 104 hedge funds reported owning stakes in UnitedHealth Group Incorporated. The most significant stakeholder in the firm during this period was Rajiv Jain’s GQG Partners, which holds a $1.63 billion stake in the company.

Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated in its second quarter 2023 investor letter:

“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.

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