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10 Best Healthcare Dividend Stocks to Buy Now

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·10 min read
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In this article, we will be looking at the 10 best healthcare dividend stocks to buy now. To skip our detailed analysis of the healthcare sector, you can go directly to see the 5 Best Healthcare Dividend Stocks to Buy Now.

As the pandemic struck the globe, no industry or sector was spared in terms of incurring financial losses and losing business, with deteriorating activity and a global economic recession rising. And while it is true that things didn't look pretty for virtually any sector at all, the healthcare sector was perhaps the most hard-hit of all. With an increasing strain being placed on the healthcare workforce and infrastructure, among other things, this reality is not surprising. However, alongside this, it is also not surprising that the healthcare sector, including stocks like AbbVie Inc. (NYSE: ABBV), Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Merck & Company, Inc. (NYSE: MRK), were able to immensely profit in the aftermath of the COVID-19 pandemic.

More importantly, with a number of changes taking hold of the sector particularly in light of new technology and digital tools and services, the sector is set to further benefit, according to a Deloitte report on the healthcare sector's 2021 outlook. With the rise of such new tools, customer satisfaction and adherence to medical guidelines are expected to drastically improve, allowing both the sector to benefit from greater activity and the global community to benefit from healthier lifestyles and increased satisfaction with such lifestyles to boot. But more than the practical positive changes the sector is witnessing in 2021 so far, what may be of interest to investors is the economic aspect of the new changes in store for them.

According to the Wall Street Journal, healthcare stocks managed to return about 13% as of this July, and while this gain is not at par with the benchmark S&P 500 Index just yet, there is hope that it will soon improve. An example within the sector of a booming giant bringing in eye-popping results so far in 2021 is UnitedHealth Group, Incorporated (NYSE: UNH), which has managed to pull in highly optimistic results in the second quarter of 2021. Bringing in an EPS of $4.70, beating estimates by $0.24, and a revenue of $71.32 billion, up 14.78% year over year and beating estimates by $1.77 billion, the company managed to leave investors and analysts alike hopeful for the healthcare sector at large. As such, the sentiment on investing in healthcare remains bullish so far this year, with most people having high hopes and expectations for the sector in the coming months.

Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Medical, Healthcare
Medical, Healthcare

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Let's now look at the 10 best healthcare dividend stocks to buy now.

Our Methodology

Insider Monkey tracks the data of about 866 hedge funds as of the end of the first quarter. We have used this data to pick healthcare stocks that are popular among hedge funds today. These stocks all also have dividend yields of over 2%, and are positively rated among analysts today. Finally, they also have strong fundamentals demonstrating their financial strength and stability. We have mentioned the dividend yields and the number of hedge fund holders for each stock as well, ranking them from the lowest to the highest dividend yield.

Best Healthcare Dividend Stocks to Buy Now

10. CVS Health Corporation (NYSE: CVS)

Number of Hedge Fund Holders: 62 Dividend Yield: 2.4%

CVS Health Corporation (NYSE: CVS) is an American healthcare and health services provider. The company operates through its Pharmacy Services, Retail/LTC, and Health Care Benefits segments. It ranks 10th on our list of the best healthcare dividend stocks to buy now.

This August, Deutsche Bank analyst George Hill raised his price target on shares of CVS Health Corporation (NYSE: CVS) from $95 to $101. The analyst also retained a Buy rating on the company's shares in light of its positive performance in the second quarter of 2021.

In the second quarter of 2021, CVS Health Corporation (NYSE: CVS) had an EPS of $2.42, beating estimates by $0.35. The company's revenue was $72.62 billion, up 11.13% year over year and beating estimates by $2.35 billion. CVS Health Corporation (NYSE: CVS) has gained 17.44% in the past 6 months and 22% year to date.

By the end of the first quarter of 2021, 62 hedge funds out of the 866 tracked by Insider Monkey held stakes in CVS Health Corporation (NYSE: CVS) worth roughly $1.32 billion. This is compared to 56 hedge funds in the previous quarter with a total stake value of approximately $961 million.

Like AbbVie Inc. (NYSE: ABBV), Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Merck & Company, Inc. (NYSE: MRK), CVS Health Corporation (NYSE: CVS) is a good stock to invest in

ClearBridge Investments, an investment management firm, mentioned CVS Health Corporation (NYSE: CVS) in its first-quarter 2021 investor letter. Here's what they said:

“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold CVS in the first quarter, in the health care sector.”

9. AstraZeneca PLC (NASDAQ: AZN)

Number of Hedge Fund Holders: 34 Dividend Yield: 2.4%

AstraZeneca PLC (NASDAQ: AZN) is among the first and most successful companies to produce and distribute a vaccine to the coronavirus. The company discovers and develops prescription medicines in a range of medical areas, such as oncology, respiratory, neuroscience, and gastroenterology. It commercializes these medicines across the globe and ranks 9th on our list of the best healthcare dividend stocks to buy now.

This August, JPMorgan's analyst James Gordon resumed coverage of shares of AstraZeneca PLC (NASDAQ: AZN) with an Overweight rating. The analyst mentioned that he also saw an opportunity for a re-rating of AstraZeneca PLC (NASDAQ: AZN) shares.

In the second quarter of 2021, AstraZeneca PLC (NASDAQ: AZN) had an EPS of $0.45, missing estimates by $0.24. The company's revenue was $8.22 billion, up 31% year over year and beating estimates by $724.6 million. AstraZeneca PLC (NASDAQ: AZN) has gained 14.19% in the past 6 months and 16.29% year to date.

By the end of the first quarter of 2021, 34 hedge funds out of the 866 tracked by Insider Monkey held stakes in AstraZeneca PLC (NASDAQ: AZN) worth roughly $2.7 billion. This is compared to 41 hedge funds in the previous quarter with a total stake value of approximately $3 billion.

Like AbbVie Inc. (NYSE: ABBV), Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Merck & Company, Inc. (NYSE: MRK), AstraZeneca PLC (NASDAQ: AZN) is a good stock to invest in

8. Johnson & Johnson (NYSE: JNJ)

Number of Hedge Fund Holders: 81 Dividend Yield: 2.4%

Johnson & Johnson (NYSE: JNJ) is also among the first and most successful healthcare companies to come up with a vaccine against COVID-19, with the Janssen vaccine also being rumored to be highly effective against the newer and deadlier Delta variant. The company operates through its Consumer Health, Pharmaceutical, and Medical Devices segments and ranks 8th on our list of the best healthcare dividend stocks to buy now.

Cantor Fitzgerald holds an Overweight rating on shares of Johnson & Johnson (NYSE: JNJ) as of this July, in light of the company's vaccine against COVID-19 showing strong resistance to the Delta variant. Analyst Louise Chen at the firm has placed a $200 price target on the shares as well.

In the second quarter of 2021, Johnson & Johnson (NYSE: JNJ) had an EPS of $2.48, beating estimates by $0.20. The company's revenue was $23.31 billion, up 27.14% year over year and beating estimates by $802.29 million. Johnson & Johnson (NYSE: JNJ) has gained 7.35% in the past 6 months and 13.64% year to date.

By the end of the first quarter of 2021, 81 hedge funds out of the 866 tracked by Insider Monkey held stakes in Johnson & Johnson (NYSE: JNJ) worth roughly $7 billion. This is compared to 81 hedge funds in the previous quarter with a total stake value of approximately $6 billion.

7. National HealthCare Corporation (NYSE: NHC)

Number of Hedge Fund Holders: 6 Dividend Yield: 2.7%

National HealthCare Corporation (NYSE: NHC) works with and offers services to skilled nursing facilities, assisted living facilities, independent living facilities, home healthcare programs, and a behavioral health hospital. The company ranks 7th on our list of the best healthcare dividend stocks to buy now and is based in Tennessee.

In the second quarter of 2021, National HealthCare Corporation (NYSE: NHC) had an EPS of $0.98. The company's revenue was $263.16 million, up 0.6% year over year and beating the previous quarter's revenue of $228.22 million. National HealthCare Corporation (NYSE: NHC) has gained 15.25% in the past 6 months and 12.10% year to date.

By the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in National HealthCare Corporation (NYSE: NHC) worth roughly $56.9 million. This is compared to 9 hedge funds in the previous quarter with a total stake value of approximately $55.8 million.

Like AbbVie Inc. (NYSE: ABBV), Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Merck & Company, Inc. (NYSE: MRK), National HealthCare Corporation (NYSE: NHC) is a good stock to invest in

6. Bristol-Myers Squibb Company (NYSE: BMY)

Number of Hedge Fund Holders: 81 Dividend Yield: 2.9%

Bristol-Myers Squibb Company (NYSE: BMY) works to discover and develop biopharmaceutical products for their licensing, manufacture, and marketing across the globe. The company is based in New York and ranks 6th on our list of the best healthcare dividend stocks to buy now, offering products in a range of medical areas like hematology, oncology, immunology, and others.

Citigroup reiterated its Buy rating on shares of Bristol-Myers Squibb Company (NYSE: BMY) this April, alongside a $77 price target set by analyst Andrew Baum.

In the second quarter of 2021, Bristol-Myers Squibb Company (NYSE: BMY) had an EPS of $1.93, beating estimates by $0.03. The company's revenue was $11.70 billion, up 15.54% year over year and beating estimates by $474.30 million. Bristol-Myers Squibb Company (NYSE: BMY) has gained 13.35% in the past 6 months and 11.89% year to date.

By the end of the first quarter of 2021, 81 hedge funds out of the 866 tracked by Insider Monkey held stakes in Bristol-Myers Squibb Company (NYSE: BMY) worth roughly $5.04 billion. This is compared to 131 hedge funds in the previous quarter with a total stake value of approximately $6.1 billion.

Like AbbVie Inc. (NYSE: ABBV), Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Merck & Company, Inc. (NYSE: MRK), Bristol-Myers Squibb Company (NYSE: BMY) is a good stock to invest in

Click to continue reading and see the 5 Best Healthcare Dividend Stocks to Buy Now.

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Disclosure: None. 10 Best Healthcare Dividend Stocks to Buy Now is originally published on Insider Monkey.