10 Best Healthcare and Insurance Stocks To Buy Following the 2026 Democratic Midterm Sweep

Democratic victories in both chambers of Congress have lifted hopes of relief for health insurers and hospital operators, putting renewed attention on healthcare stocks favored by hedge funds.

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4. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 117

Johnson & Johnson has two major healthcare businesses: Innovative Medicine, which develops pharmaceutical treatments, and MedTech, which provides medical technologies across several specialties. November month-to-date share-price performance through November 6, 2026, shows that the stock gained 1.1%. In the third quarter of 2026, Innovative Medicine sales increased 7.7% year over year to $16.757 billion, while MedTech sales grew 2.5% to $8.642 billion. It further reported sales growth of 5.9% year over year to $25.4 billion, supported by growth across its healthcare businesses.

However, GAAP diluted EPS fell to just $0.09 from $2.12 a year earlier. The company attributed the result partly to a one-time special charge associated with its proposed talc litigation resolution, alongside expenses related to acquisitions and collaborations.

READ ALSO: Johnson & Johnson vs. Danaher: Which Healthcare Stock Looks Better Positioned Following Earnings?

Adjusted diluted EPS was $2.59, compared with $2.80 in the prior-year quarter. Consequently, the company’s revenue growth did not translate into an improvement in adjusted earnings during the period. Johnson & Johnson has also continued advancing its MedTech portfolio, including receiving market authorization for its OTTAVA robotic surgical system.

The underlying healthcare business remains substantial for the company, but the difference between revenue growth and reported profitability warrants attention. The financial consequences of litigation and continued investment in new technologies remain important considerations.

3. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Holders: 118

Thermo Fisher Scientific Inc. (NYSE:TMO) occupies a central position in the healthcare supply chain through its scientific instruments, laboratory services, diagnostics, and technologies used in pharmaceutical research and manufacturing.

Its investment case differs from that of drug developers because its business provides products and services to companies undertaking scientific research and commercial production. This creates exposure to a broad range of healthcare and biotechnology activity rather than the success of any single therapy.

In its third-quarter 2026 results, revenue increased 9% year over year to $12.14 billion, including 6% organic revenue growth. GAAP diluted EPS increased 9% to $4.64, while adjusted EPS rose 15% to $6.68. The difference between these measures is relevant when evaluating profitability and the effects of items excluded from adjusted results. Gain insight into how TMO compares with other popular stocks in the sector with our comparative article on Thermo Fisher (TMO) vs Danaher (DHR): Which Life Sciences Stock Looks Better Positioned?

Thermo Fisher’s growth also needs to be assessed against spending conditions across pharmaceutical development, laboratory services, and scientific equipment markets. The company’s diversified customer base and improving earnings provide an established operating foundation. However, investors need to keep in mind that continued organic growth is an important indicator of demand across its businesses, particularly when evaluating performance independently of acquisitions.

2. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 143

UnitedHealth Group Incorporated (NYSE:UNH) is the company on this list with the most direct exposure to the healthcare policy debate following the Democratic midterm victory. Through UnitedHealthcare and Optum, it operates across health insurance, medical services, pharmacy-related services, and healthcare technology.

The election has renewed attention on potential changes to Medicaid funding and Affordable Care Act coverage, although those developments should not be treated as guaranteed improvements in UnitedHealth’s financial performance.

The company’s third-quarter 2026 results showed revenue of $112.7 billion and earnings from operations of $6.6 billion. Operating cash flow reached $5.1 billion, equivalent to approximately 1.2 times net income. UnitedHealth also raised its full-year earnings outlook, projecting adjusted net earnings of at least $20.50 per share.

READ MORE: Is UnitedHealth (UNH) the Healthcare Stock to Watch Right Now?

Nevertheless, the company’s financial performance remains tied to medical costs, reimbursement arrangements, and the economics of its insurance and healthcare services businesses. Policy changes could affect those operations differently. The election introduces a new consideration for investors, but the company’s ability to manage medical expenses and sustain operating profitability remains central to the investment case.

1. Eli Lilly and Company (NYSE:LLY)

Number of Hedge Fund Holders: 152

Eli Lilly and Company (NYSE:LLY) has continued to distinguish itself through the commercial success of its diabetes and obesity treatments, particularly Mounjaro and Zepbound. Unlike health insurers benefiting from expectations of changes to federal healthcare spending, Lilly’s immediate financial performance could continue to be driven principally by demand for its medicines.

The company’s third-quarter 2026 results demonstrated the scale of that demand. Revenue increased 39% year over year to $24.4 billion, supported by 53% volume growth. However, realized prices declined 15%, illustrating the importance of distinguishing expanding treatment volumes from the prices received by the company. Mounjaro generated $10.7 billion in worldwide quarterly revenue, up 65%, while Zepbound contributed $5.3 billion in U.S. revenue for the quarter, up 48%. Access our extensive research on Lilly’s bull and bear case for free here.

Lilly also raised the midpoint of its full-year 2026 revenue guidance to a range of $91 billion to $92 billion. Reported diluted EPS increased 16% to $7.22, although the quarter included substantial acquired research and development charges and approximately $900 million in benefits, primarily from $410 million of Jardiance milestones and favorable adjustments to rebate and discount estimates.

Lilly’s growth demonstrates the commercial strength of its leading medicines. The sustainability of that growth depends on continued demand, manufacturing capacity, realized pricing, and the broader development of its pharmaceutical portfolio.

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