The 13 Best Health-Care Stocks to Buy for 2020
One of the most attractive reasons to invest in health-care stocks continues to be the world's aging population.
The United Nations says people age 65 and older are the fastest-growing age group worldwide. It estimates that by 2050, one out of every six people will be 65 or older, accounting for 16% of the planet's total population, up from 9% in 2011. That figure is even larger in Europe and North America, where the U.N. predicts the number will be closer to 25%. The demand for health-care products and services should only increase as a result.
Yes, health-care stocks will be coming off a weak 2019. Through mid-November, the S&P 500 was sitting on nearly 25% gains, while the sector had improved by roughly half that. They'll also have to contend with uncertainty regarding the future of health care as the 2020 presidential election approaches. But don't sleep on the space in the year ahead.
For one, health-care stocks tend to outperform during periods of economic weakness. For instance, the Health Care Select Sector SPDR Fund (XLV) delivered a 39.6% total loss (share price plus dividends) during the 2007-09 bear market - more than 15 percentage points better than the S&P 500. Thus, headlines warning of an economic slowdown or even a recession in 2020 actually bode well for the sector.
Also, health care has traded at a price-to-earnings ratio more expensive than the overall market more often than not over the past 20 years. However, according to the Charles Schwab Center for Research, the sector's P/E currently is cheaper than the S&P 500, providing a better buying opportunity.
Here, then, are the 13 best health-care stocks to buy for 2020, including a couple of funds for investors who want to diversify.
UnitedHealth Group
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Market value: $255.2 billion
Dividend yield: 1.6%
Analysts' opinion: 20 Buy, 2 Overweight, 4 Hold, 0 Underweight, 0 Sell
2019 has been a volatile affair for longtime UnitedHealth Group (UNH, $269.40) shareholders who have seen their stock crest above $265, then fall back below $220, twice this year. They'll find out soon whether UNH can sustain its current attack above $265.
"Medicare for All" (MFA) has been the biggest headwind holding the medical benefits provider back - something that
