Healthcare Picks for the Long Term

While the inner workings of and interactions between the various healthcare industry branches are extremely complex, demand for its products and services is not likely to wane. In an article for this week’s TheStreet, Validea CEO John Reese offers his perspective on industry prospects and identifies four stock picks with good vital signs:

  • Johnson & Johnson (JNJ) is engaged in the research and development, manufacture and sale of a range of products in the health care field. It earns solid scores under our guru strategies based in part on healthy cash flow per share and trailing 12-month sales of more than triple the market mean.
  • Merck (MRK) is a global healthcare company offering health solutions through prescription medicines, vaccines, biologic therapies and animal health products. The company scores well due to its dividend yield coupled with healthy cash flow-per-share, with shares outstanding representing more than 4 times the market mean.
  • McKesson (MCK) is engaged in delivering pharmaceuticals, medical supplies and health care information technology. The company gets a thumb’s up based on earnings-per-share growth, return-on-total capital and earnings yield.
  • United HealthGroup (UNH) is a diversified health care company operating through UnitedHealthcare, OptumHealth, OptumInsight and OptumRx, and gets high marks for its price-to-sales ratio and the stock’s relative strength.

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