Best 5 Healthcare Dividend Stocks – A must to build a core portfolio

Healthcare can be a profitable sector to have in your portfolio. Any dividend growth investor should consider having at least 1 healthcare dividend stocks.

As a market, the healthcare industry is highly regulated and not easy to get into but yet, new research and findings continue to offer growth. There are 2 industry groups and  6 industries in the healthcare sector each with their own business potential, feel free to complement your holdings across multiple industries. The breakdown at a high level is between:

  • Health Care Equipment & Services
  • Pharmaceuticals, Biotechnology & Life Sciences

The Healthcare Sector

Before we jump into the best healthcare stocks, here is the list of available healthcare stocks.

Ticker Ticker Company Market Cap P/E Aristocrat Graph SectorID IndustryID
JNJ NYSE:JNJ Johnson & Johnson 423.65 17.63 YES 1 8 35
UNH NYSE:UNH UnitedHealth Group Incorporated 385.14 25.47 NO 1 8 49
PFE NYSE:PFE Pfizer Inc. 238.00 13.52 NO 1 8 35
TMO NYSE:TMO Thermo Fisher Scientific Inc 229.73 22.87 NO 1 8 33
LLY NYSE:LLY Lilly 223.78 29.13 NO 1 8 35
DHR NYSE:DHR Danaher Corporation 214.01 34.14 NO 1 8 33
ABT NYSE:ABT Abbott Laboratories 209.88 24.06 YES 1 8 63
MRK NYSE:MRK Merck & Co., Inc. 204.10 13.97 NO 1 8 35
ABBV NYSE:ABBV AbbVie Inc 196.47 9.43 YES 1 8 35
MDT NYSE:MDT Medtronics 168.59 24.00 YES 1 8 63
BMY NYSE:BMY Bristol Myers Squibb Co. 127.24 8.47 NO 1 8 35
AMGN NASDAQ:AMGN Amgen Inc. 118.65 12.85 NO 1 8 35
CVS NYSE:CVS CVS Health Corporation 111.33 11.37 NO 1 8 49
SYK NYSE:SYK Stryker Corporation 99.43 28.88 NO 1 8 63
ANTM NYSE:ANTM Anthem Inc. 94.15 18.58 NO 1 8 49
GILD NASDAQ:GILD Gilead Sciences Inc. 85.32 8.25 NO 1 8 35
BDX NYSE:BDX Becton Dickinson & Co 68.52 17.98 YES 1 8 65
WBA NASDAQ:WBA Walgreens Boots Alliance, Inc. 40.98 9.71 YES 1 8 77
ABC NYSE:ABC AmerisourceBergen Corporation 24.80 13.63 NO 1 8 64
CAH NYSE:CAH Cardinal Health Inc 13.82 8.01 YES 1 8 64
PRGO NYSE:PRGO Perrigo Company plc 6.14 15.31 NO 1 8 36
EXE TSE:EXE Extendicare 0.64 10.92 NO 1 8 113

The Best Healthcare Stocks

The angle of the list here is towards dividend growth investing as opposed to income or growth only.

Johnson & Johnson

JNJ - Johnson & Johnson Johnson & Johnson is one of the leading healthcare companies in the world, with over one billion people using its products daily. The company has a well-diversified global footprint with the US accounting for 50% of the company’s revenues, and international markets constituting the remaining 50%.

The company offers the world’s largest range of consumer healthcare products and a comprehensive portfolio of surgical technology and specialty solutions. It is a global leader in seven consumer categories and owns a strong portfolio of iconic brands.

Some of its top selling and well-known brands include Neutrogena, Aveeno, Listerine, Tylenol, Motrin, and Zyrtec. Johnson & Johnson operates through an extensive distribution network, product portfolio, and a huge customer base. It is one of the most reputed healthcare organizations in the world and has developed a deep understanding of its customers’ needs with more than a century’s old experience.

Key Investment Data

  • Ticker: NYSE:JNJ
  • Sector: Healthcare
  • Industry: Drug Manufacturers - General
  • Market Cap: 423.65B
  • P/E: 17.63
  • Dividend Yield: 2.63%
  • Payout Ratio (TTM): 60.60%

AbbVie Inc

ABBV - AbbVie Inc AbbVie is a leading research-driven global biopharmaceutical company. The company produces drugs for several different therapeutic areas such as rheumatology, oncology, virology, neurology, etc.

AbbVie’s blockbuster drug, Humira is one of the best-selling drugs globally and accounts for nearly 60% of the company’s revenue. The drug is used to treat psoriasis and rheumatoid arthritis. Other key products include Lupron, Creon, Androgel, and Marinol. The company also has a robust late-stage pipeline across several therapeutic areas.

The company has a large distribution network consisting of AbbVie-owned distribution centers and warehouses from where AbbVie's products reach wholesalers, distributors, and government agencies worldwide. AbbVie operates through only one business segment - Pharmaceuticals.

Key Investment Data

  • Ticker: NYSE:ABBV
  • Sector: Healthcare
  • Industry: Drug Manufacturers - General
  • Market Cap: 196.47B
  • P/E: 9.43
  • Dividend Yield: 4.68%
  • Payout Ratio (TTM): 137.20%

Abbott Laboratories

ABT - Abbott Laboratories Abbott Laboratories is a leading healthcare and research company having a presence in more than 160 countries worldwide. Over 14 million people around the world use Abbott’s medicines every day. It is the world’s leading company in glucose testing for diabetes.

With over 130 years in business, Abbott has become the worldwide leader in adult nutrition and blood screening. It enjoys a leadership position in virtually every market it serves. Abbott owns a leading portfolio of innovative solutions in diabetes, cardiovascular, and neuromodulation.

The company commands a large market share position in diabetic care and cardiovascular disease treatments in the developed markets. It derives nearly 60% of its revenue from developed markets and 40% from emerging markets. It is a leading pharmaceutical company in India, Russia, and across Latin America. Its portfolio consists of more than 1500 products across multiple therapeutic areas.

Key Investment Data

  • Ticker: NYSE:ABT
  • Sector: Healthcare
  • Industry: Medical Devices
  • Market Cap: 209.88B
  • P/E: 24.06
  • Dividend Yield: 1.52%
  • Payout Ratio (TTM): 47.60%

Becton Dickinson & Co

BDX - Becton Dickinson & Co Becton Dickinson is a global medical technology company engaged in the development, manufacture, and sale of a broad range of medical supplies, devices, and diagnostic products. The company serves customers including healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and individual consumers in more than 190 countries worldwide.

Becton Dickinson’s products are manufactured and sold in the USA, Europe, EMA, Greater Asia, Latin America, and Canada. The company operates through a strong network of independent distribution channels and sales representatives. It also has extensive R&D facilities in North America, China, France, India, Ireland, and Singapore.

Becton Dickinson’s business segments are BD Medical which is the largest, accounting for 54% of (2018) revenues, BD Life Sciences (27%) and BD Interventional (19%). By solutions, medication delivery is the largest constituting 23% of (2018) revenues, followed by medication management (16%), pharmaceutical, preanalytical, diagnostic systems, and diabetes care, biosciences, urology, etc.

Key Investment Data

  • Ticker: NYSE:BDX
  • Sector: Healthcare
  • Industry: Medical Instruments & Supplies
  • Market Cap: 68.52B
  • P/E: 17.98
  • Dividend Yield: 1.39%
  • Payout Ratio (TTM): 51.00%

Cardinal Health Inc

CAH - Cardinal Health Inc Cardinal Health Inc. is a global, integrated healthcare solutions provider. It is a leading distributor of pharmaceutical and medical products to pharmacies, hospitals and other healthcare providers in more than 60 countries including the US, Canada, and European and Asian markets.

Cardinal Health has become a leading household name with more than three million patients using its healthcare products. In addition, the company also supplies 10,000 specialty physician clinics, 6,700 laboratories, 26,000 pharmacies. Cardinal Health has a huge presence in the U.S. in nearly 85% of the U.S. hospitals. It has operations in 46 countries and manages one of the country’s largest distribution networks.

The company manufactures nearly 2.5 billion healthcare products each year. Accounting for nearly 90% of the revenues, the Pharmaceutical is Cardinal Health’s larger segment involved in the distribution of specialty and generic pharmaceutical, healthcare, and consumer products in the US. The Medical segment (constituting the remaining 10%) manufactures and distributes Cardinal Health and other branded medical, surgical and laboratory products, in the US and other key markets.

Key Investment Data

  • Ticker: NYSE:CAH
  • Sector: Healthcare
  • Industry: Medical Distribution
  • Market Cap: 13.82B
  • P/E: 8.01
  • Dividend Yield: 4.03%
  • Payout Ratio (TTM): 94.40%

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DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.