MCK to ABC: 5 healthcare stocks that returned strong 1-year, YTD gains

Highlights 

• Bristol-Myers Squibb (NYSE:BMY) has a P/E ratio of 27.0 and a dividend yield of 2.84%.
• Merck & Company, Inc.'s (NYSE:MRK) P/E ratio is 16.02, and the dividend yield is 3.09%.
• AbbVie Inc.'s (NYSE:ABBV) dividend yield is 3.71%, and the annual dividend is US$5.64.

The global healthcare market was worth nearly US$25 billion in 2021, and it is anticipated to grow to around US$51.2 billion by 2028. Bloomberg reported that the compounded annual growth rate (CAGR) could be around 12.9% during the period.

The healthcare sector is diverse, with companies ranging from manufacturing and selling drugs and medical devices to offering services like insurance, hospitals, etc.

The pandemic has brought a significant focus on the sector. The pharmaceutical companies were called to the task of developing covid vaccines to mitigate the health crisis.

Here we discuss the top five healthcare stocks that generated positive one-year and YTD gains.

McKesson Corporation (NYSE:MCK)

Closing price on May 12, 2022: US$322.01
Market Capitalization: US$47.27 billion 

Irving, Texas-based McKesson is a wholesaler of generic, branded, and specialty pharmaceutical products. It sells the products to pharmacies, hospital networks, and healthcare providers. 

McKesson is currently divesting from the pharmaceutical wholesale and distribution business in Europe and Canada to use the capital for strategic growth in the US.

It also supplies medical-surgical equipment and technology solutions to clients.

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For the fiscal ended March 31, 2022, the company earned revenue of US$264 billion compared to US$238 billion a year ago. The net income came in at US$1.11 billion or US$7.23 per share diluted against a net loss of US$4.5 billion or US$28.26 per share diluted in the previous fiscal.

The stock traded in the range of US$339.94 to US$184.43. It has a P/E ratio of 45.11 and a forward P/E for one year of 13.88. The dividend yield is 0.57%, with an annualized dividend of US$1.88.

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Bristol-Myers Squibb Company (NYSE:BMY)

Closing price on May 12, 2022: US$76.3
Market Capitalization: US$162 billion

The New York-based company discovers, develops, and markets drugs for oncology, cardiovascular, and immune disorders. The primary focus is on immuno-oncology related disorders. It has exited several nonpharmaceutical businesses to focus on specialty drugs.

The company posted revenue of US$11.64 billion for the March quarter of 2022, compared to US$11.07 billion in the same quarter the previous year. 

Its net income was US$1.28 billion or US$0.59 per share diluted, compared to US$2.02 billion or US$0.89 per share diluted in the March quarter of 2021.

The stock traded in the range of US$78.17 to US$53.22. It has a P/E ratio of 27.0, and a forward P/E for one year of 10.08. The dividend yield is 2.84%, with an annualized dividend of US$2.16.

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Merck & Company, Inc. (NYSE:MRK)

Closing price on May 12, 2022: US$90.83
Market Capitalization: US$226.5 billion

Merck makes drugs for cancer and cardiometabolic diseases. The Kenilworth, New Jersey-based company also provides vaccines to prevent hepatitis B and pediatric conditions. It also sells drugs for animal health-related issues. 

The company posted a revenue of US$15.9 billion for the quarter ended March 31, 2022, compared to US$10.6 billion in the previous year. 

Its net income attributable to the company was US$4.3 billion or US$1.70 per share diluted compared to US$3.18 million or US$1.25 per share diluted in the same quarter in 2021.

The stock traded in the range of US$91.40 to US$15.32. It has a P/E ratio of 16.02, and a forward P/E for one year of 12.43. The dividend yield is 3.09, with an annual dividend of US$2.76.

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AbbVie Inc. (NYSE:ABBV)

Closing price on May 12, 2022: US$154.29
Market Capitalization: US$271.7 billion

AbbVie is a pharmaceutical company focused on immunology and oncology drugs. It’s headquartered in North Chicago, Illinois.

For the quarter ended March 31, 2022, it posted a net income of US$4.49 billion or US$2.51 per share diluted compared to US$3.55 billion or US$1.99 per share diluted in the prior year. The revenue was US$13.54 billion compared to US$13.01 billion in the March quarter of 2021.

The stock traded in the range of US$175.91 or US$105.56. It has a P/E ratio of 22.06, and a forward P/E for one year of 10.97. The dividend yield is 3.71%, and the annualized dividend is US$5.64.

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 AmerisourceBergen Corporation (NYSE:ABC)

Closing price on May 12, 2022: US$151.61
Market Capitalization: US$32.18 billion

Pennsylvania-based AmerisourceBergen is a pharmaceutical wholesaler. The company supplies generic, branded, and specialty pharmaceutical products to pharmacies, hospitals, and healthcare providers.

The company reported a revenue of US$57.7 billion in the quarter ended March 31, 2022, compared to US$49.14 billion in the same quarter in 2021. 

The net income came in at US$555.2 billion or US$2.59 per share diluted compared to US$434 billion or US$2.10 per share diluted in the previous year. 

The stock traded in the range of US$167.19 to US$111.34. It has a P/E ratio of 18.74, and a forward P/E for one year of 13.86. The dividend yield is 1.14%, with an annualized dividend of US$1.84.

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Bottom line:

Healthcare stocks have outperformed the S&P 500 index this year. While the index fell 3.61% in one year and 15.59% YTD, these stocks remained positive in both periods. One of the factors for their positive returns could be the minimum impact of interest rate hikes. Most other sectors may have been negatively affected.