7 booming health care stocks to buy now
These medical shares are good for what ails you.
According to the regulatory agency behind Medicare and Medicaid, health care spending is expected to grow by an average of 5.8% per year through 2020. The same agency also forecasts that health care spending will make up a whopping 20% of GDP in eight years.
This is partly due to the growing ranks of baby boomers. The individuals in this age bracket are typically more health-conscientious and are willing to pay a premium to stay fit. So it's no wonder health care services companies are doing so well.
Here are seven blue-chip health care stocks to buy right now.
Amerisourcebergen Corp. (ABC) helps pharmaceutical companies, hospitals, pharmacies and doctors be more efficient in dispensing drugs. The company recently completed $598 million in share repurchases this year and has just approved another $750 million. ABC has also raised its dividend twice in 2011, making it the seventh consecutive year the company has upped its dividend payment. Next year, I expect we'll see more smart measures and perhaps an acquisition or two that will give the company further boosts.
Alexion Pharmaceuticals Inc. (ALXN) develops drugs that fight against autoimmune, hematology, kidney and neurology disorders as well as cancers and other diseases. ALXN is a fantastic stock whose shares have been consistently breaking through 52-week highs as the company delivers stellar earnings reports quarter after quarter. Make sure you own this stock in 2012.
Cerner Corp.'s (CERN) products and services allow companies in this sector to reduce costs and boost their bottom lines. With rising costs in the health care industry any cost-saving measures are essential. The Centers for Medicare and Medicaid Services estimate U.S. health care spending at $2.6 trillion or 17.5% of 2010 GDP, and independent experts believe that widespread adoption of modern health care software and IT services could cut health care costs by $162 billion annually. This is why Congress has provided more than $35 billion in "meaningful use" of health care IT incentives, giving a meaningful boost to Cerner's business. Bookings -- a good indicator for future growth -- totaled $650 million, up 31% from Q3 2010, indicating more record quarters in store for 2012.
Edwards Lifesciences (EW) is the world's largest creator of artificial heart valves, including valves made from animal tissue and annuloplasty rings that repair damaged valves. Recently, the company received FDA approval to sell the Sapien Heart valve, the first transcatheter valve sold in a U.S. market. Thanks to this one product, EW expects $20 million to $25 million in additional revenue for Q1 2012 and $150 million to $250 million in the first full year. This is a tremendous development and I expect that it will be a strong year ahead for EW shares.
Novo Nordisk (NVO) is an excellently run pharmaceutical manufacturer. It is one of the world's leading producers of insulin, which is used to treat diabetes. And as populations around the world continue to gain weight, diabetes rates are skyrocketing -- sadly -- even among children. Just this month, we got the latest predictions for global diabetes growth. It is now estimated that one in 10 adults will have diabetes by 2030. This is a frightening outlook, but NVO will be there with the treatments this growing group of patients will need.
Perrigo Company (PRGO) is the world's largest manufacturer of over-the-counter pharmaceutical products for the store brand market. These drugs, treatments and remedies are the low-cost alternative for patients, and this is fueling the company's sales and earnings growth. The recent acquisition of Paddock Laboratories Inc. will further boost the company's reach and is a long-term positive for the stock.
UnitedHealth Group Inc. (UNH) is a heavy hitter in the health care sector, being the largest single health carrier in the United States. The company served nearly 34.4 million patients at the end of the third quarter, up about 1.7 million from a year earlier, and it spent a less-than-expected 80.7% of its premium revenue on medical claims (the ratio is an important gauge of profitability). Worldwide, UNH serves more than 75 million people. With a leading industry position, this company's solid stock performance will continue.
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