Are health care stocks risky?

Asked by: Miss Tomasa Bode V  |  Last update: February 14, 2025
Score: 4.7/5 (27 votes)

Over the past two years, healthcare stocks have experienced significant outflows and underperformance relative to the broader market, despite positive catalysts like innovation and weight-loss drugs. Since early 2023, the S&P 500 healthcare index has risen just 4%, while the S&P 500 surged 52%.

Is healthcare stock a good investment?

Investing in medical stocks can be a good long-term strategy because people always need healthcare services and products. However, it's important to know that these stocks can be risky. Changes in technology, government rules, and health crises can affect their value.

Is investing in healthcare risky?

Bottom Line. The health care sector is large and diverse, with opportunities for profit and significant risk. While demand for health care remains strong, the industry faces disruptive technologies and strict regulations, making it unpredictable for investors.

Do healthcare stocks do well in a recession?

Healthcare is a sector generally renowned for faring better during downturns. The reasoning behind this is clear: You need healthcare to live and are therefore much less likely to skimp on it even when your income declines. This is referred to as price inelasticity.

What is the outlook for healthcare stocks in 2025?

However, some stocks' chances for success look particularly good. We asked three Motley Fool contributors to pick healthcare stocks they think could be big winners in 2025. Here's why they chose Amgen (AMGN -0.89%), Eli Lilly (LLY 2.45%), and Summit Therapeutics (SMMT -3.61%).

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Is healthcare a booming industry?

In total, the health care sector has grown by 8.2% from March 2022 to March 2024, which is more than double the 3.8% growth rate of all other industries combined.

Will healthcare stocks do well in 2024?

Healthcare ranked behind only the financials and information technology sectors in terms of contributions to the S&P 500's earnings. S&P's estimates project healthcare stocks will generate earnings growth of 10.2% in 2024, outpacing earnings growth expectations for the broader S&P 500.

What is the safest stock during a recession?

Utility sector stocks are generally considered defensive investments and are popular flight-to-safety plays during economic downturns. Utility companies have stable and predictable demand and cash flows, as well as limited competition.

Which industry is most recession-proof?

Here's a list of recession-proof industries you can choose to ensure you have a reliable income if the economy slows down:
  • Law enforcement. ...
  • DIY and repairs. ...
  • Financial services. ...
  • Budget travel. ...
  • Information technology. ...
  • Social media. ...
  • Freight and logistics. ...
  • Comfort food.

Why are private equity firms buying hospitals?

Firms saw the potential for profits and began buying up physician practices and health facilities, from hospitals to nursing homes to fertility clinics, looking to at least double their initial investment and then sell within a short time, often three to seven years.

Are healthcare stocks volatile?

As a result, healthcare share prices are often less volatile than those of companies in other sectors. So, a strategically constructed healthcare portfolio can offer investors both offensive and defensive characteristics: solid growth potential in rising markets and less downside risk.

Is CVS a good stock to buy?

Based on analyst ratings, CVS Health Corp's 12-month average price target is $63.22. CVS Health Corp has 21.67% upside potential, based on the analysts' average price target. CVS Health Corp has a consensus rating of Moderate Buy which is based on 13 buy ratings, 5 hold ratings and 0 sell ratings.

Which are the best stocks to invest in 2024?

Best-Performing Stocks of 2024
  • AppLovin APP.
  • MicroStrategy MSTR.
  • Palantir Technologies PLTR.
  • Vistra Energy VST.
  • Robinhood HOOD.

What not to invest in during a recession?

Avoiding highly indebted companies, high-yield bonds and speculative investments will be important during a recession to ensure your portfolio is not exposed to unnecessary risk. Instead, it's better to focus on high-quality government securities, investment-grade bonds and companies with sound balance sheets.

Is Pfizer a good stock to buy?

This is a rare high-yield stock with capital gains upside

It's been around for generations. While I wouldn't call it a growth stock, it could have market-beating potential at these prices. The stock trades at only 9 times earnings, a bargain for a business expected to grow by 8% annually.

How will healthcare stocks do in 2025?

Despite these risks, the overall outlook for healthcare stocks appears very good over the long term. Aging demographic trends around the world, combined with advances in technology, should open up tremendous opportunities for healthcare stocks -- and provide healthy returns for patient investors.

Is healthcare a good industry to invest in?

The Bottom Line. Investing in healthcare stocks can provide generous returns, but it is also tedious due to the many factors affecting stock prices. The healthcare sector is vast, Businesses within the sector have varying needs in capital investment and operating costs.

Is the healthcare industry risky?

Common risks include exposures to hazardous drugs, infectious diseases, high-stress levels, emotionally charged situations, and job burnout. Protect yourself and others by learning how to treat, minimize, or eliminate risks in your workplace.

What is the fastest growing healthcare industry?

The fastest growing setting in ambulatory care (and the health care industry overall) is offices of mental health practitioners with 28.8% growth projected.