Which Healthcare Stocks are leading the Market?

The health care sector is one of the biggest in the U.S., and it’s not slowing down anytime soon. In fact, health care spending is expected to hit $5.3 trillion by 2025!

What Are Health Care Stocks?

Health care stocks are shares of companies in the medical industry. This includes:

• Hospitals and health care facilities
• Biotech and pharmaceutical companies
• Medical equipment makers
• Insurance providers

These companies are all part of the health care world, and you can invest in them just like any other stock.

Top 9 Health Care Stocks (Based on 1-Year Performance)

Here are some of the best-performing health care stocks in the S&P 500 over the past year:

Ticker	Company Name	1-Year Performance
CAH	Cardinal Health	+66.65%
GILD	Gilead Sciences	+62.96%
PODD	Insulet Corporation	+48.41%
SOLV	Solventum Corp	+47.30%
BSX	Boston Scientific	+36.06%
RMD	Resmed Inc	+33.79%
COR	Cencora Inc	+33.16%
DGX	Quest Diagnostics	+32.96%
ABT	Abbott Laboratories	+31.56%

Source: Finviz (as of July 2, 2025)

Also Read: How do Geopolitical Events Influence Global Markets?

Types of Health Care Stocks

Let’s break down the main types of companies in the health care sector:

1. Health Care Facilities & Operators

When people think of health care, they usually picture hospitals. Some companies own these hospitals and lease them out (like Medical Properties Trust, a REIT), while others run them directly (like Tenet Healthcare).

2. Biotech & Pharmaceutical Companies

These companies make medicines. Pharma companies use chemicals, while biotech companies use living organisms. In investing, they’re often grouped together.

3. Medical Equipment Companies

These businesses make the tools and supplies used in health care.

• Medical supply companies (like Patterson Companies) make things like gloves and cleaning products.
• Medical device companies (like Medtronic) build machines like pacemakers or ventilators.

4. Health Insurance & Pharmacy Benefit Managers

These are the companies that help pay for your health care.

• Insurers (like UnitedHealth Group) collect premiums and cover medical costs.
• Pharmacy Benefit Managers (like ExpressScripts) work behind the scenes to get medications to patients at lower prices.

Also Read: How to Build a Diversified Investment Portfolio?

Pros and Cons of Investing in Health Care Stocks

✅ Pros

• More stable during recessions: People still need medical care, even when the economy is down. Health care tends to do better than other industries in tough times.
• Dividends: Many health care companies have strong cash flow and pay steady dividends. Some are even part of the “dividend aristocrats” group — meaning they’ve increased payouts every year for 25+ years.

❌ Cons

• Political uncertainty: Health care reform is always a hot topic. Big changes in government policy could impact profits.
• Regulatory risks: If a company can’t get FDA approval for a new product, it can be a huge setback. Hospitals also rely heavily on government programs like Medicare and Medicaid.

How to Invest in Health Care Stocks

Ready to invest? Here are two main options:

1. Buy Individual Stocks

You can pick specific companies to invest in, but keep in mind — this takes time and research. Plus, it’s risky to put all your money in just one or two stocks.

2. Buy Health Care ETFs

ETFs (exchange-traded funds) let you invest in a group of health care companies at once.

• Some, like Health Care SPDR Select Sector Fund, give you broad exposure across the whole sector.
• Others, like the iShares U.S. Medical Devices ETF, focus on a specific niche.

ETFs are easier to manage than researching dozens of individual stocks — but it’s still a good idea to check what’s in the fund before investing.

Also Read: How to Rebalance Your Investment Portfolio?

Bonus: Using Options with Health Care Stocks

If you’re a more experienced investor, you might explore options trading. Some strategies include:

• Selling put options to buy stocks at a lower price
• Selling covered calls to earn extra income from stocks you already own

Just make sure you fully understand the risks before diving in.