Best Health Care Stocks to Watch or Invest in Right Now

If you are looking for a new sector for your investments, you may be considering health care stocks. Healthcare companies have the potential to generate significant long-term growth. Moreover, as the global population continues aging, the opportunities in the sector are likely to continue expanding.

With these facts in mind, it’s no surprise that so many people are showing interest in health care stocks. However, not all stocks in the healthcare sector will succeed and singling out the stocks most likely to return on investment can be a challenge.

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Best Healthcare Stocks in 2025

Here’s a list of the seven best healthcare stocks for May 2025:

Why Invest in Healthcare Stocks?

Health care stocks are a good way to diversify your portfolio. There are several reasons to invest in health care stocks. Here are a few: 

• Essential industry: No matter what is happening in the economic cycle, healthcare will always be needed. Healthcare stocks are more resilient in downturns. 
• Aging global population: By 2030, one in six individuals will be over the age of 60. The demand for healthcare services and medical devices will only increase going forward. 
• Technological advancements: Breakthroughs in pharmaceuticals and biomedical devices will only continue. This innovation may create additional revenue streams. 
• Dividend opportunities: Many healthcare stocks provide reliable dividends. 
• Government support: The healthcare industry is often backed by government initiatives. 

Health care isn’t just essential — it’s one of the most consistent sectors in the stock market. Here’s why:

• Growth Potential: Aging populations and rising chronic diseases are driving demand.
• Innovation: Advancements in biotech, AI in diagnostics and personalized medicine continue to transform the space.
• Recession-Resilient: People need medical care regardless of market conditions.

But don’t ignore the risks:

• Regulatory hurdles
• Patent cliffs for major drugs
• Market cycles, especially post-pandemic

Healthcare Stocks vs. Other Investment Options

How do healthcare stocks compare to other investments? Check out this chart that compares healthcare stocks with other investment options.

Health care hits a sweet spot for investors seeking long-term growth with less drama than tech and more upside than utilities.

Risks of Investing in Health Care Stocks

Any investment comes with its own unique risk. Investing in healthcare stocks has the following disadvantages: 

• Highly regulated: The healthcare industry is highly regulated. FDA approvals, fluctuations in drug prices and healthcare policy reform can impact healthcare stocks. 
• Litigation risk: Drug companies and medical device companies often face lawsuits. This can result in financial damage and reputational harm. 
• Patent expirations: Once patents expire on drugs, generic brands emerge. This shift can cause profits to rapidly decline. 

To manage risk, many investors mix large, stable companies (like JNJ) with high-growth bets (like MRNA or biotech ETFs).

Trends Shaping the Health Care Sector in 2025

In 2024, there was a sizable lag in healthcare stocks. It looks, though, that trend has changed. As of May 2025, the healthcare sector is one of the best-performing industries.

While other stocks have shifted dramatically downward because of tariffs and general economic uncertainty, healthcare stocks have continued to hold strong. Since healthcare is needed regardless of the economy, the stocks have held onto a defensive position.

Another trend contributing to healthcare stocks’ surge is the aging population. Increased demand for healthcare needs is going to have a positive impact on growth in stocks. 

Health care giants like Johnson & Johnson and Pfizer are even continuing to offer dividends despite the economic uncertainty. 

Lastly, a move toward pairing AI and digital health is driving investment in these types of companies. 

How to Buy Healthcare Stocks

Here’s how to move forward with buying healthcare stocks:

• Step 1: Choose a brokerage platform and fund your account – Choose a platform that allows you to buy healthcare stocks and link a bank account.
• Step 2. Do your research – Look for healthcare stocks. Focus on subsectors like pharmaceuticals, biotech, insurers and medical devices. Also, take a look at financials, dividend history and growth potential. 
• Step 3. Find the company ticker – Locate the company ticker on the platform. 
• Step 4. Decide how much you want to invest – You may want to evaluate your full portfolio before investing. 
• Step 5. Place an order – Choose your order type and submit.

Final Take to GO: Should You Invest in Health Care Stocks?

Health care remains one of the most durable and innovative sectors for investors — balancing long-term potential with recession resistance. Whether you’re a beginner or a seasoned investor, adding a few health care stocks or ETFs to your portfolio could help you weather market volatility while still aiming for growth.

Ready to explore your options? Compare brokerage accounts, review ETF offerings or dive deeper into our beginner’s investing guide to start building your health-focused portfolio today.

Information is accurate as of May 8, 2025.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.