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Healthcare Stocks: How to Buy the Medical Sector in 2024

Healthcare has been a hot-button political topic in America for years.

However, the debate is really heating up for the 2020 election.

A field of left-leaning candidates is pushing for major healthcare reform.

Some politicians even call for the government to entirely take over the private health insurance sector.

As you can imagine, this high level of uncertainty weighed heavily on healthcare stocks this year.

It could be a great time to pick up the best healthcare stocks for cheap.

However, few doubt the long-term stability of these businesses.

As long as socialists don’t take control of all three branches of the U.S. government, there is next to zero chance that the private healthcare sector will be dissolved.

Despite the low likelihood of full-blown annihilation, healthcare stocks are some of the worst-performing investments of the year.

For contrarian investors, a setup like this screams long-term opportunity.

Medical Industry Outlook in 2020

Politics are driving the sell-off in the healthcare sector, but these businesses face other challenges in the years ahead as well.

Baby boomers are getting old. The generation born immediately after World War II comprises a huge portion of the U.S.

population, and Americans born during that period are entering their Golden Years.

Many of these aging Americans will naturally encounter health problems, and that creates more expenses for U.S.

insurance companies. Experts predict that the aging population will put the squeeze on insurance profits for years to come.

health care stocks-senior care

The ‘2030 Problem’

In the year 2030, all baby boomers will be between 66 and 84 years old.

According to the U.S. Census Bureau, there will be over 77 million retired-aged people in the U.S. by 2030; over one-fifth of the entire population.

 This approaching problem is commonly referred to as “The 2030 Problem”.

On the bright side, 2030 is still 10-plus years away, so there’s time to prepare.

However, experts expect this massive influx of elderly will pressure the financial and physical resources of the healthcare sector.

More elderly people equals more insurance claims, so the 2030 Problem is likely to put the squeeze on insurer profits.

However, one business setback is another’s opportunity and home healthcare providers could be the ultimate winners as the population gets older.

Opportunities in Home Healthcare Stocks

An aging population is a bad thing for insurance company profits, but it could create more opportunities for outpatient and home healthcare providers.

This sector is expected to expand significantly in the coming years.

Grandview Research predicts the global home healthcare market will grow to over half-a-trillion dollars by 2026.

Health insurance stocks paid off big for investors over the past decade, but the insurance bull market could be close to topping out.

Insurer profits are under pressure and there are significant regulatory risks to their business models.

However, the home healthcare and outpatient services sector seems almost certain to expand significantly in the near future.

Best Health Care Stocks

The healthcare industry is complicated so you might need some help to get started.

To give you some ideas, we’ve laid out our top healthcare stocks from across various sectors.

These are some of the most successful medical companies on the public market.

Read up on our top healthcare stocks and start following the health care market today.

Health Insurance Stocks

These companies provide health insurance services for corporate and private clients.

If you want to make a bet on insurance stocks, these companies should be near the top of your watchlist.

best medical stocks

United Healthcare (NYSE: UNH)

With a market capitalization of over $237 billion, this healthcare heavyweight is one of the largest insurers on the planet.

This gigantic healthcare stock is the type of company that is extremely threatened by the democratic fields proposed healthcare policies, so it will likely be especially volatile throughout the course of next year’s campaign.

However, any significant dip could be a buying opportunity for big-picture investors.

This company is extremely large and stable, but its profits could be squeezed as the ‘2030 problem’ becomes more pronounced.

CVS Health Corp. (NYSE: CVS)

A few years ago, classifying CVS as a retail or pharma stock would have probably made more sense.

However, after the company’s acquisition of Aetna, CVS also has a major stake in the insurance business.

The Aetna merger got off to a rough start, and shares of CVS took a major hit in early 2019 after it reported significant expenses relating to the acquisition.

The stock started to rebound later in the year, and it’s now up significantly from its bottom in early 2019.

This could be one of the best straight plays on consumer healthcare on the market.

Medical Technology Stocks

These healthcare companies are the leading innovators in the medical sector.

Healthcare information management is a massive industry and it’s only going to grow as the number of patients in the system continues to increase.

Cerner Corporation (NASDAQ: CERN)

This company is one of the leading providers of healthcare information technology services.

It provides a full suite of compliant software solutions for care providers.

Cerner’s products allow providers to manage clinical documents, finance, and human resources much more efficiently.

This company has a market cap of over $20 billion, making it one of the largest healthcare technology stocks on the market.

Veeva Systems, Inc. (NASD: VEEV)

Veeva offers cloud-based software to the domestic healthcare industry and international healthcare markets.

The firm offers a multichannel, healthcare-compliant CRM that is extremely popular with providers.

The software includes patient data management solutions and applications for managing commercial functions, like sales, marketing, research, and much more.

medical industry

Home Healthcare Stocks

As you read above, healthcare stocks are facing a huge influx of elderly patients in 2030. A recent survey revealed that 60% of Boomers want to stay in their current home or apartment, even if they develop a physical disability.

That’s going to create a huge demand for stay-at-home healthcare services.

Amedisys, Inc. (NASDAQ: AMED)

Amedisys is one company that could be positioned to benefit from an increase in the population of elderly Americans.

They provide a variety of home healthcare and hospice services that could be in high demand after the 2030 problem starts to impact the market significantly.

In addition to health services, Amedisys’s personal care segment assists patients with carrying out daily living activities.

Chemed Corporation (NYSE: CHE)

Chemed provides hospice and palliative care services to patients throughout the United States.

In fact, It’s the country’s largest provider of end-of-life hospice care.

  • Palliative Care (n): Medical treatments intended to alleviate the symptoms of a disease or disorder, especially one that is terminal, when a cure is not available.

The company organizes its operation into two primary operating segments.

VITAS is Chemed’s healthcare services segment, and it employs a vast network of health professionals.

The network includes physicians, registered nurses, social workers, clergy, and a variety of other support personnel.

As the market leader in end-of-life hospice, Vitas and Chemed could generate significant revenue growth as the population ages.

Interestingly, this company has ties to a totally unrelated industry.

In addition to VITAS, Chemed’s other primary operating segment is Roto-Rooter.

Yes, the plumbing services provider. It’s an unusual dichotomy but, none the less, Chemed’s VITAS healthcare services business looks like a long-term winner.

Hospital Stocks

Even if the majority of baby boomers want to avoid managed care settings, shorter-term health problems are unavoidable for many Americans.

People have health problems more frequently as they age, and many of those problems will inevitably lead to hospital stays.

Hospital operators don’t usually trade on public exchanges, so many hospital stocks represent companies that own and lease hospital facilities to healthcare providers.

These companies are mostly organized as real estate investment trusts (REITs).

  • Check out our picks for the top REIT stocks, sector-by-sector, here.

Welltower Inc. (NYSE: WELL)

Welltower is the largest healthcare REIT currently trading on public markets.

It has a market capitalization of over $34 billion and pays $3.48 in annual dividend payments.

This firm owns hospitals and senior care properties in the United States, Britain, and Canada.

It also owns post-acute care and outpatient facilities.

Welltower has a diversified portfolio of holdings that make it an exceptionally well-suited financial vehicle for investors looking for exposure to the senior healthcare market.

How To Find The Best Healthcare Stocks

The healthcare sector is vast.

However, large companies have a distinct advantage because they typically have diversified portfolios.

On the other hand, small-cap healthcare stocks may offer a greater reward, but investors must have the stomach to deal with the volatility.

For example, if a drug fails to get FDA approval and the company doesn’t have other drugs in the pipeline, it could severely damage the value of its share price.

It’s important to pay attention to politics, especially if you’re looking to invest in a healthcare benefits company.

Also, take the time to visit the FDA.ORG, the website for the U.S. Food & Drug Administration.

Pay attention to the FDA calendar (biopharmcatalyst.com is an excellent resource).

Keep in mind trading drug healthcare stocks around an upcoming event can be extremely volatile.

Sign up for Stock Dork alerts to learn more about the best healthcare stocks, including home healthcare stocks.

Don’t forget to follow the Dork on Twitter for the latest stock market news and much more.


Chris Dios is a financial journalist & entrepreneur from Central New Jersey. A number cruncher by trade, Chris studied business & accounting at Drexel University in Philadelphia, PA, before settling into a career covering the market. As an analyst, Chris’s primary areas of expertise include business fundamentals, technical analysis, and macroeconomics. He also has deep insights into geopolitics and international markets as a result of a longstanding obsession with history and global news. Chris takes a cautiously aggressive approach to investing, but he’s not easily swayed by hype. He prefers businesses with proven business models, wide economic moats, and strong growth prospects, however, he’s not afraid to take a chance when the odds are right. When he’s not watching the market, Chris spends most of his time raising grass-fed, open-pasture cattle on his small family ranch in Montana, and playing fetch with his cattle dogs, Ranger & Indiana.