If you are looking for a new sector for your investments, you may be considering health care stocks.
Health care companies can offer long-term growth potential and tend to hold up better than many industries when the economy slows. A big reason is simple: people still need care, prescriptions and medical devices in good times and bad.
With that in mind, it helps to focus on businesses with clear revenue drivers, strong balance sheets and products or services that stay in demand across market cycles.
At A Glance: Best Health Care Stocks
Company Ticker Exposure Type Risk Profile/Use Case One-Line Reason It Stands Out AbbVie ABBV Pharma Dividend-focused pharma exposure Large portfolio with cash flow supporting ongoing shareholder returns UnitedHealth Group UNH Managed Care and Health Services Defensive, scale-driven health care exposure Massive scale across insurance and care services Vertex Pharmaceuticals VRTX Biotech Growth-focused biotech with concentration risk Strong franchise with pipeline-driven upside Merck MRK Pharma Blue-chip pharma with key product concentration Major oncology franchise with global reach HCA Healthcare HCA Hospitals Cyclical within health care, volume-driven Large provider network with admissions-driven revenue Gilead Sciences GILD Biopharma Income plus innovation exposure Mix of established therapies and pipeline optionality Intuitive Surgical ISRG MedTech Higher-growth health care technology Robotic surgery leader tied to procedure volume growth
Why Invest In Health Care Stocks?
Health care is a huge part of the U.S. economy and it is still growing. National health spending rose to $5.3 trillion in 2024, or $15,474 per person, representing 18.0% of U.S. GDP, according to the Centers for Medicare & Medicaid Services.
Demographics matter too. By 2030, 1 in 6 people in the world will be age 60 or older, which tends to raise demand for health services, procedures and long-term care.
Best Health Care Stocks Right Now
AbbVie (ABBV)
AbbVie is often considered for its combination of established medicines and a shareholder-return focus. Like many large pharma companies, results can be influenced by patent timelines and competitive launches, which is why its risk profile is still higher than a typical utility or consumer staples stock. For investor due diligence, AbbVie’s annual report outlines key business risks and product concentration factors.
UnitedHealth Group (UNH)
UnitedHealth combines insurance operations with a large health services platform, which can help diversify revenue streams. Guidance and utilization trends can move the stock quickly, especially when medical costs change faster than expected. UnitedHealth has also outlined a very large revenue outlook range in recent filings, giving investors a sense of its scale.
Vertex Pharmaceuticals (VRTX)
Vertex is a biotech name investors watch for its strong commercial base and research pipeline. The trade-off is concentration risk, since biotechs often rely heavily on a smaller set of therapies compared with diversified pharma companies. If you want the clearest view of how Vertex frames its pipeline, risks and forward-looking priorities, start with its annual report filings.
Merck (MRK)
Merck is a large pharma company with global scale and a deep presence in oncology. A key point for short and long-term investors is revenue concentration: Merck disclosed that Keytruda represented 46% of total sales in 2024, which can create both strength and single-product risk.
HCA Healthcare (HCA)
HCA is a major hospital operator, which means results are tied to admissions volume, payer mix and labor costs. In its annual report, HCA reported 2024 revenues of $70.603 billion, with growth driven by higher equivalent admissions and revenue per equivalent admission.
Gilead Sciences (GILD)
Gilead is a biopharma company with both established therapies and pipeline exposure across multiple areas. It also has a dividend history that investors may look at when they want health care exposure with income potential. For a primary-source view of business drivers and risks, its annual report and dividend history pages are useful starting points.
Intuitive Surgical (ISRG)
Intuitive Surgical is a medical technology company best known for its robotic surgery systems, with results that can track procedure growth over time. In its 2024 annual report, the company said customers used its products in nearly 2.7 million procedures in 2024, up 17% from 2023, highlighting how utilization trends can drive performance.
Trends Shaping The Health Care Sector
A few themes tend to show up across the strongest health care businesses:
- Rising spending base: CMS data shows health care spending growth remains elevated, which supports long-run demand for many subsectors.
- Aging population: Global aging is a structural demand tailwind for care delivery, chronic disease management and medtech.
- Policy and reimbursement pressure: Even strong companies can face margin pressure when reimbursement rules, pricing scrutiny or utilization patterns shift. CMS projections also highlight how health spending is expected to keep taking a larger share of GDP over time.
Health Care Stocks Vs. Other Investment Options
| Investment Type | Pros | Cons |
|---|---|---|
| Health Care Stocks | Essential demand, innovation-driven growth potential, dividends from many large firms | Regulation, patent cliffs, reimbursement and litigation risk |
| Tech Stocks | Higher growth potential in strong markets | More valuation sensitivity and often higher volatility |
| Bonds | Lower volatility, income potential | Lower long-term growth, inflation and rate risk |
| Real Estate | Income potential, inflation hedge in some environments | Rates can pressure returns, sector-specific risks |
Risks Of Investing In Health Care Stocks
Health care is defensive, but it is not “set it and forget it.” Common risks include regulation, pricing pressure, patent expirations and company-specific concentration. The SEC also emphasizes that stock investing involves risk of loss, even in well-known companies.
A practical approach many investors use is diversification across subsectors: pharma, insurers, providers and medtech rather than relying on one theme.
How To Buy Health Care Stocks
- Pick a brokerage account that fits your needs for research tools and fees.
- Choose your exposure: individual stocks for targeted bets or ETFs for broad diversification.
- Decide position size based on your overall portfolio risk, not a headline you saw this morning.
- Place an order using a market order for simplicity or a limit order if price matters.
- Monitor the right inputs: earnings, guidance, policy updates and product milestones.
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 demand with potential recession resistance. If you want a straightforward way to get exposure, focus on high-quality leaders with clear business drivers, then diversify across different parts of the health care system.
Ready to explore your options? Compare brokerage accounts, consider whether an ETF fits your approach or build a watchlist of a few health care stocks you can follow quarter to quarter.
Best Health Care Stocks FAQ
- What are the best health care stocks for beginners?
- Many beginners start with large, established companies in pharma, managed care or medtech, then diversify across subsectors to reduce single-stock risk.
- Are health care stocks good for long-term investing?
- Health care can be a strong long-term sector because demand tends to persist across economic cycles, though outcomes still depend on company execution and regulation.
- Why do health care stocks sometimes drop even when demand is strong?
- Pricing pressure, reimbursement changes, patent expirations, litigation, trial results or higher medical costs can all impact earnings expectations.
- Should I buy individual health care stocks or a health care ETF?
- A health care ETF can provide instant diversification, while individual stocks offer more targeted exposure but require more monitoring and risk management.
- What should I watch before investing in a pharma or biotech stock?
- Look at product concentration, patent timelines, trial milestones, regulatory risk and how management discusses these factors in annual reports.
Information is accurate as of Jan. 22, 2026.
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.