5 Best Healthcare Stocks to Buy for Q1 2025

Healthcare is one of the biggest industries in the United States. Total Medicare and Medicaid spending stood at over $955 billion and $805 billion, respectively in 2022. The two are expected to grow to over $1 trillion soon. 

This growth has created a huge opportunity for companies in the industry. This includes companies like device manufacturers, biotech companies, technology providers, insurance, and drug manufacturers. The industry is so big such that it represents about 12% of all companies in the S&P 500 index. So, here are some of the best healthcare stocks to buy.

What are the top healthcare stocks to buy?

The table below displays our healthcare stock picks. You can find their most up to date market price by following the links, or keep reading to learn more about why each one was chosen in more detail.

1. Veeva Systems (NYSE: VEEV)

• Market cap: $29 billion
• Dividend yield: N/A
• 1-year return: -3%
• Country: USA
• Stock price: $183

Veeva Systems is one of the best healthcare stocks to invest in. It is a leading company that provides cloud solutions for companies in the life sciences industry. Its solutions include the Veeva Vault Clinical, Veeva Commercial Cloud, and Veeva Data Cloud. These services are used by some of the biggest companies like Bayer, Haleon, Takeda, and Roche.

Veeva Systems has been growing rapidly in the past few years. Its annual revenue rose from $1.1 billion in 2020 to over $2.6 billion in 2023. It has also become a highly profitable company, generating over $550 million in annual profits. 

Most importantly, the company is reasonably valued. Its revenue growth stands at about 15% while its net income margin is about 22%, giving it a rule of 40 multiple of 37%. If its growth continues, it will likely attain a figure of 40. 

2. Johnson & Johnson (NYSE: JNJ)

• Market cap: $353 billion
• Dividend yield: 3.37%
• 1-year return: -7.2%
• Country: USA
• Stock price: $147

Johnson & Johnson is another top healthcare company to invest in. It is a top conglomerate that provides its solutions through three key segments: pharmaceutical, medical devices, and consumer health.Most recently, it separated its consumer health division to a publicly traded company known as Kenvue. 

Johnson & Jonson is one of the few Triple-A-rated companies because of its strong free cash flows and strong balance sheet. It has over $25 billion in long-term debt and $26 billion in cash and short-term investments. 

J&J generates over $85 billion in annual revenue and $38 billion in net profit. It is also a great dividend payer and has some of the best margins in the industry. Data shows that its gross profit margins are about 70% while the net profit margin is 44%. Therefore, the company will likely continue doing well in the coming years because of the strong demand for its products.

3. Intuitive Surgical (NASDAQ: ISRG)

• Market cap: $148 billion
• Dividend yield: N/A
• 1-year return: 35%
• Country: USA
• Stock price: $417

Intuitive Surgical is not a company that many people have heard about. But most surgeons know it well. It is a firm that manufactures the da Vinci system, which helps surgeons provide their services. 

It is estimated that the da Vinci system cost over $1.5 million. Buyers also must pay an annual service contract charge, instrument costs, and training and implementation costs. 

All these factors have made Intuitive Surgical to be one of the fastest-growing companies in the healthcare industry. Its annual revenue has jumped from over $4.47 billion in 2019 to over $7.1 billion in 2023. Its net profit has also jumped to over $1.78 billion. 

Intuitive Surgical is a good investment because of its strong revenue growth, huge moat in the robotic industry, and the potential for more growth. It also has a solid balance sheet with over $4.8 billion in cash and no debt. However, it is also highly valued with a forward PE ratio of 76, which is higher than most companies.

4. Eli Lilly (NYSE: LLY)

• Market cap: $765 billion
• Dividend yield: 0.61%
• 1-year return: 94%
• Country: USA
• Stock price: $849

Eli Lilly has become one of the biggest companies in the world with a market cap of over $765 billion. Most of this growth has happened because of its weight loss and diabetes drugs. 

The company also has a huge market share in other drugs like Alzheimer’s, cancer, and immunology. As a result, its revenue has imploded higher in the past few years. It jumped from over $22.3 billion in 2019 to over $35 billion in the trailing twelve months.

Analysts believe that Eli Lilly’s business will continue thriving, with its annual revenue expected to come in at $43 billion and $53 billion in the next two financial years. It also has a room to grow its profits in the coming years. Data shows that its gross margins are 805 while the net income margin is 17%.

The key risk for investing in Eli Lilly is that it is one of the most overvalued companies in Wall Street. It has a forward P/E ratio of 63, which is higher than the sector median of 26. This means that the company needs to continue delivering. Also, there is a risk that the weight loss will become saturated as more drugs come to the market.

5. Zoetis (NYSE: ZTS)

• Market cap: $80 billion
• Dividend yield: 0.98%
• 1-year return: 8%
• Country: USA
• Stock price: $176

Zoetis is a large healthcare company that focuses on an industry that many firms avoid: animal health. It has become a leading provider of drugs that are used by veterinarians from around the world.

Its business has been growing in the past few years. After recording an annual revenue figure of $6.2 billion, its revenue surged to over $8.5 billion in 2023. Its net income has jumped to over $2.34 billion. 

Zoetis has more room to grow. Analysts expect that its revenue will soar to over $9.15 billion this year followed by $9.7 billion in 2025. They also believe that the company is highly undervalued, with the average target being at $213, higher than the current $176. Analysts at HSBC, Goldman Sachs, Stifel, and Barclays have a buy rating on Zoetis.

Where to buy the best healthcare shares

The platforms below are the best places to buy healthcare stocks now. You can head to the website using the links in the table or read our reviews to learn more about each one.

4.6

eToro

Min. Deposit $100

Fees 1%

No. assets 3600+

Demo account Yes

Visit site

eToro review

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

4.5

Plus500

Min. Deposit $100

Fees From 2%

No. assets 2800+

Demo account Yes

Visit site

Plus500 review

CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

This information is NOT relevant to EU residents who are to be serviced by EU subsidiaries of the Plus500 Group, such as Plus500CY Ltd, authorised by CySEC (Reg. 250/14). Different regulatory requirements apply in Europe such as leverage limitations and bonus restrictions.

4.4

Public

Min. Deposit $20

Fees 1-2%

No. assets 9000+

Demo account No

Visit site

Public.com review

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

What is a healthcare stock?

Any company involved in developing, buying, or selling medical products. This includes pharmaceutical companies developing drugs, biotech firms focused on innovative therapies for diseases, medical device companies, providers of healthcare services and facilities, and health insurers. Investing in healthcare stocks offers exposure to a defensive sector supported by demand for medical care, drugs, technologies, and insurance.

Top healthcare stocks tend to be leaders in their niches with solid brands, pipelines of new products, and growth prospects as populations age and healthcare spending rise globally. However, healthcare is also a complex industry facing extensive regulations, competitive threats, pricing pressures, and patent expirations.

A thorough analysis of companies’ financials, target markets, competitive advantages, and technological advances can identify promising healthcare stocks poised to benefit from secular growth trends.

Are healthcare shares a good investment?

Healthcare stocks can make excellent long-term investments for your portfolio, providing stability and growth opportunities. The healthcare sector benefits from resilient demand for medical services, drugs, technologies, and insurance. As populations grow and age globally, health care spending is projected to rise steadily. This creates tailwinds for pharmaceutical companies with new drugs, innovative biotech firms targeting diseases like cancer or rare genetic disorders, makers of essential medical devices, and health insurers providing coverage.

However, there are risks to be considered in this regulated sector facing pricing pressures. Companies must continuously develop promising new therapies and technologies while navigating competitive threats from generics and biosimilars. Unexpected clinical trial failures can devastate biotech stocks. Government scrutiny over drug pricing and changes to health insurance rules also pose risks.

Investors should assess companies’ growth prospects, competitive moats, financial strength, dividends, and value relative to peers. Diversification through ETFs can help smooth volatility. While not without risks, the top healthcare stocks with strong fundamentals are poised to deliver solid risk-adjusted returns over time by riding demographic and technological tailwinds.

Methodology: How we choose the best healthcare stocks

At Invezz, our mission is to empower our readers with the most accurate and reliable financial information. Our curated selection of the best stocks in specific industries is designed to provide investors with well-researched, expertly reviewed stock recommendations. Our team follows a rigorous process to ensure our readers receive high-quality, trustworthy stock selections.

• Initial screening. Our team of experienced stock market analysts conducts an initial screening of stocks within the chosen industry. This involves analyzing a broad range of companies based on key financial metrics such as revenue growth, profitability, debt levels, and market capitalization.
• Earnings reports and financial analysis. Analysts review the latest earnings reports of shortlisted companies. This includes a detailed assessment of financial statements, looking for consistent earnings growth, strong balance sheets, and positive cash flow trends. Special attention is given to year-over-year performance and quarterly results.
• Sector analysis. A comprehensive sector analysis is conducted to understand the macroeconomic factors affecting the industry. This includes examining market trends, competitive landscape, regulatory changes, and technological advancements. Our analysts utilize industry reports, market research, and economic forecasts to gain a holistic view of the sector.
• Analyst recommendations. We consider recommendations from reputable sources such as Barron’s and Zacks. These sources provide expert opinions and ratings on stocks, which serve as an additional layer of validation for our selections. Incorporating external analyst recommendations ensures that our curated stocks are backed by a consensus of expert views.
• Internal review. After the initial selection by our analysts, the chosen stocks are reviewed by a sub-editor. The sub-editor ensures that the analysis is clear, concise, and adheres to Invezz’s editorial guidelines. This review process helps maintain the quality and readability of our content, making it accessible to a broad audience.
• Quarterly updates. To ensure our stock recommendations remain relevant and up-to-date, we update the curated section quarterly. Each update cycle involves re-evaluating the stocks based on the latest financial reports, industry developments, and market conditions. This regular update process ensures that our recommendations reflect the most current information available.

Our approach combines expert analysis, comprehensive research, and regular updates to deliver reliable and insightful investment recommendations. Read more about our review process and editorial policy.