If there’s one sector in particular that investors will often flock to during times of economic uncertainty – it’s healthcare stocks. After all, demand remains constant on the products and services offered by such entities irrespective of how the economy is performing.
Additionally, the coronavirus pandemic, in particular, has resulted in more and more UK investors looking to add healthcare stocks to their portfolio.
In this guide, we explore the best Healthcare stocks to consider buying in 2021. We’ll also discuss the best UK brokers to buy Healthcare stocks in a low-cost and convenient manner.
- 1 Top 10 Healthcare Stocks 2021
- 2 Best Healthcare Stocks UK Reviewed
- 3 Are Healthcare Stocks a Good Investment?
- 4 How to Choose the Best Healthcare Stocks for You
- 5 Best Healthcare Stock Brokers in the UK
- 6 How to Buy Healthcare Stocks in the UK
- 7 Conclusion
- 8 eToro – Buy Healthcare Stocks with 0% Commission
- 9 FAQs
Top 10 Healthcare Stocks 2021
Here’s a breakdown of the 10 healthcare stocks today.
- Moderna – Best Healthcare Stock of 2021 – Gains of Almost 800% in 2020 – Invest now
- Johnson & Johnson – Best Healthcare Dividend Stock – Invest now
- GW Pharmaceuticals – Best Healthcare Growth Stock – Invest now
- AstraZeneca – Best Healthcare Stock for Long-Term Investors
- Novo Nordisk – Best European Healthcare Stock
- SmileDirectClub – Best Undervalued Healthcare Stock
- Editas Medicine – Healthcare Stock With 12-Month Returns of 135%)
- Joint Corp – High-Risk Healthcare Stock With Huge Upside Potential
- Smith & Nephew – Best Healthcare Stock on the FTSE 100
- The Consumer Staples Select Sector SPDR® Fund – Best Healthcare Stock ETF (63 Different Shares)
Best Healthcare Stocks UK Reviewed
There are hundreds of healthcare stocks that you can invest in from the comfort of your home. Not only in the UK, but on exchanges in the US, Germany, Canada, and more.
While you might be inclined to focus exclusively on traditional pharmaceutical stocks, there are plenty of other sectors within the healthcare scene. For example, private hospital chains, medical device manufacturers, and even medical insurance providers.
Taking this into account, below you will find a diversified list of the best healthcare stocks to invest in right now.
1. Moderna – Best Healthcare Stock of 2021 – Gains of Almost 800% in 2020
There are three coronavirus vaccines that have since been approved in the UK – and many other regions around the world. This includes US-based Moderna. Crucially, it is important to note that the vaccine produced by Moderna is actually a lot easier to distribute than that of its Pfizer counterpart.
From an investment perspective, this makes it more attractive. For example, while the Pfizer vaccine must be stored at -94 Fahrenheit, the Moderna vaccine requires a temperature of just -4 Fahrenheit. This is fundamental – especially for the third-world.
In other words, emerging nations don’t have the required technology or supply chain to distribute the Pfizer vaccine effectively, meaning that Moderna’s vaccine is likely to benefit from much greater demand.
This viewpoint is fully evident in the speed at which Moderna stocks have grown over the past 12 months. For example, You would have paid just $20 per share on this top healthcare stock in January 2020.
Fast forward to December 2020 and the biotech company hit highs of $178. That’s an increase of almost 800%. The stocks have, however, since cooled off slightly to $129. This is likely to be in response to the AstraZeneca/Oxford University vaccine winning approval in several jurisdictions. With that said, this does allow you to buy this healthcare stock at an attractive discount.
Your capital is at risk.
2. Johnson & Johnson – Best Healthcare Dividend Stocks
Next up is Johnson & Johnson – one of the largest and most established healthcare stocks on the NYSE. At the time of writing, this powerhouse is behind a market capitalization of over $420 billion. For those unaware, Johnson & Johnson (JNJ) is behind a range of consumer packaged products, pharmaceutical treatments, and medical devices.
The reason that Johnson & Johnson makes the cut as one of the best healthcare stocks to buy right now is actually two-fold. First and foremost, Johnson & Johnson is one of the best healthcare dividend stocks. In fact, this is an understatement, as the firm is actually a ‘Dividend Aristocat’.
This means that it has increased the size of its dividend payment every quarter for at least 25 consecutive years. In the case of Johnson & Johnson, the firm has been doing this for nearly 60 years. Based on current prices, this healthcare stock is offering a running yield of just over 2.5%.
Secondly, Johnson & Johnson is also a great healthcare stock to invest in because of its promising progress on a COVID-19 vaccine. Currently, in stage 3 of its clinic trials, the Johnson & Johnson vaccine does not need to be stored in freezing conditions like that of Moderna and Pfizer. This makes it even more attractive – especially for those in the third world.
Your capital is at risk.
3. GW Pharmaceuticals – Best Healthcare Growth Stock
Growth stocks are great for those of you that are happy to take more risk in exchange for larger financial returns. If this sounds like something you’re interested in, it’s well worth checking out GW Pharmaceuticals. The UK company – which is listed on the NASDAQ exchange, has a relatively modest market capitalization of $4 billion.
However, there is significant room for growth with this top healthcare stocks entry – as it is involved in the ever-growing medical cannabis industry. More specifically, GW Pharmaceuticals specializes in treatments that are derived from cannabis plants. Notably, the firm became the first to have a cannabis-derived drug approved in the European Union.
Taking this into account, In terms of its stocks, you would have paid just $10 per share in 2012. Fast forward to early 2021 and the same stocks are priced at almost $140. Albeit these are huge returns, there is plenty of upside potential left in the making nonetheless,
Your capital is at risk.
4. AstraZeneca – Best Healthcare Stock for Long-Term Investors
If you’re looking for long-term investments to add to your share portfolio, AstraZeneca is arguably one of the best healthcare stocks for this purpose. In terms of stability, not only is AstraZeneca the largest company on the London Stock Exchange with a current valuation of almost £100 billion, but it is in possession of a super-strong balance sheet.
Furthermore – and much like Johnson & Johnson, AstraZeneca is a strong dividend payer, albeit, with a less attractive yield. Nevertheless, you could hold this healthcare stock in your portfolio for several decades with little concern. So why is AstraZeneca a buy?
Well, the obvious starting point is that of the three UK-approved coronavirus vaccines, AstraZeneca is potentially the most attractive. Firstly, while Moderna and Pfizer vaccines have a cost price of approximately $33 and $20 respectively, AstraZeneca’s is priced at just $4. This is a major cost-saving – especially for the emerging nations.
Secondly, and as noted earlier, the Moderna and Pfizer vaccines must be stored at -4°F and -94°F, respectively. In the case of the AstraZeneca vaccine, it can be stored in normal fridge conditions for up to 6 months. Once again, this is a game-changer. On the flip side, it must be noted that the AstraZeneca vaccine has a lower efficacy rate than that of the aforementioned counterparts.
Your capital is at risk.
5. Novo Nordisk – Best European Healthcare Stock
It’s not often that we discuss shares listed on the Copenhagen Stock Exchange, but that’s exactly what we will be doing with Novo Nordisk. For those unaware, this top European stock is a market leader in the diabetes treatment sector. It currently supplied more than 30 million patients globally with its type-2 diabetes drug, amounting to a market share of more than 30%.
Crucially, those in receipt of type-2 diabetes treatments will often do so for the remainder of their lives. From a business perspective, this means more than 30 million repeat customers.
In turn, although Novo Nordisk shares are going to generate overly-large returns, you’ll be buying a strong and stable healthcare stock nonetheless. In terms of recent performance, Novo Nordisk shares would have cost you 382 Danish Krones in the 12 months prior to writing this article. Today, the stocks are worth 10% more at 422 Danish Krones.
Your capital is at risk
6. SmileDirectClub – Best Undervalued Healthcare Stock
As the name suggests, SmileDirectClub is a producer of cutting-edge braces. Launched as recently as 2014, one of its most successful dentistry products is that of Invisalign. Although this hot healthcare stock has retail locations throughout the UK, North America, and Australia, the vast bulk of its business model is facilitated online.
Nevertheless, the stocks – which are listed on the NASDAQ, had a hard time in 2020. Reaching heights of $15 in March, SmileDirectClub shares then tumbled down to just $3.64 the following month. That’s a capitalization of over 75%. Although the shares have since recovered to $12, this is still 25% below pre-pandemic levels.
As such, not only can you buy this top healthcare stock at a discount, but there’s much to like about the firm moving forward. For example, across almost 91,000 individual reviews, SmileDirectClub has a Google rating of over 96%. Such a significant customer satisfaction rating illustrates that the dentistry firm is doing something right.
But even more pertinently, future financials look bright. For example, SmileDirectClub forecasts that it will hit a gross margin level of 85% after the pandemic comes to an end, resulting in revenue growth of between 20-30% per year. If these expectations come to fruition, this healthcare stock could be heavily undervalued.
Your capital is at risk
6. BioNTech – Best US Healthcare Stock
If you’re looking to add some US stocks to add to your healthcare portfolio, it might be worth looking at BioNTech. As you might know, the Pfizer coronavirus vaccine was actually produced alongside BioNTech, albeit, the latter rarely gets the full recognition that it deserves. With that said, BioNTech shares have responded vastly better to news of the approved vaccine in comparison to Pfizer.
For example, Pfizer stocks were priced at $38 each in the 12 months prior to writing this article. And today? The stocks are worth less at $36. In comparison, BioNTech shares were priced at $34 this time last year. The same stocks have since exploded to over $131.
Although at the time of writing the seems have cooled off to $105, that’s still an increase of over 200% in 1-year of trading. The key point here is that with a market capitalization of “just” $25 billion, the upside potential on BioNTech shares is considerably higher than the likes of Pfizer.
Your capital is at risk
7. Editas Medicine – Healthcare Stock With 12-Month Returns of 135%
While many healthcare stocks have generated modest returns for shareholders in recent times, this couldn’t be further from the truth with Editas Medicine. For those unaware of what the company does, it is behind cutting-edge gene-editing technologies. As a relatively new phenomenon, Editas Medicine is at the very early stages of clinical trials.
However, if successful, its gene-editing treatment can help fight hereditary blindness. In terms of its stocks, Editas Medicine shares are listed on the NASDAQ. You would have paid $32 per share in January 2020. 12 months later, the same stocks are priced at $75.
That’s a super-impressive return of almost 135% in just 1-year of trading. Crucially, Editas Medicine most-definitely meets the conditions of a growth stock – considering it only went public in 2016. At a market capitalization of just under $5 billion, the upside potential with this top healthcare stock could be sizable.
Your capital is at risk
8. Joint Corp – High-Risk Healthcare Stock With Huge Upside Potential
This addition to our list of the best healthcare stocks won’t be for everyone. This is because The Joint Chiropractic should be considered a high-risk investment. This largely because the firm is still well within its growth stage – which is evident in the fact that it possesses a market capitalization of less than $500 million.
For those unaware, Joint Corp is a US-based chiropractic clinic franchise model. Back in 2010, the firm has just 12 franchise locations throughout the US. Fast forward to late 2020 and this figure has since grown to over 560 locations. This illustrates that there is a huge demand for chiropractic clinics in North America and potentially worldwide.
From the perspective of consumers, there are two leading factors that make The Joint Chiropractic clinics attractive. Firstly, unlike the traditional segment of the industry, there is no need for patients to book an appointment weeks or months in advance. On the contrary, patients can simply turn up without an appointment.
Secondly, and perhaps most importantly, The Joint Chiropractic clinics are very well priced. For example, conventional chiropractor providers typically charged in the region of $75-$80 per session. At The Joint Chiropractic, this averages less than $30.
In terms of its stocks, The Joint Chiropractic has had a great 12 months. Priced at $16 in January 2020, the shares are worth $28 at the time of writing. That’s an increase of 28% in just 1 year. There is plenty of room for further movement, taking into account its minute market capitalization.
Your capital is at risk
9. Smith & Nephew – Best Healthcare Stock on the FTSE 100
If you’re looking to invest in the best healthcare stocks listed on the FTSE 100, it might be worth considering Smith & Nephew. This leading British pharma company is behind a full suite of medical equipment. It services three key divisions globally – wound management, orthopedics, and sports medicine.
Smith & Nephew is also behind a portfolio of subsidiaries which further increases its exposure in the healthcare industry. For example, it recently purchased Switzerland-based Atracsys Sarl – a supplier of optical tracking technologies. Recent financial results forced management at Smith & Nephew to upgrade its revenues forecast.
In particular, the firm is now expecting to see an 8% year-on-year increase in earnings. In terms of its share price action, this FTSE 100 stock was priced at 1,110p in early 2015. Fast forward to January 2021 and the stocks will now cost you over 1,500p. That’s very, albeit modesty, attractive 5-year returns of over 36%. During the same period, the FTSE 100 index is up just 17%.
Your capital is at risk
10. The Consumer Staples Select Sector SPDR® Fund – Best Healthcare Stock ETF (63 Different Shares)
If your main objective is the build a portfolio of the best healthcare stocks of 2021, why not consider an ETF? In doing so, you can invest in a basket of different healthcare companies through a single trade. One such example of a top-rated healthcare stock ETF is that of the Consumer Staples Select Healthcare Sector SPDR® Fund.
In total, this ETF will give you access to 63 of the best healthcare stocks. Johnson & Johnson, UnitedHealth Group, Merck & Co, Pfizer, Thermo Fisher Scientific, Abbott Laboratories, AbbVie, Medtronic, Danaher Corporation, and many others. The ETF portfolio is weighted to take into account the market capitalization of each healthcare stock.
Crucially, by opting for a leading healthcare ETF, you don’t need to spend lots of time researching the ins and outs of individual companies. Instead, the ETF provider will buy and sell stocks on your behalf. And of course, you can create an instantly-diversified portfolio without needing to place heaps of individual stock orders.
Your capital is at risk
Are Healthcare Stocks a Good Investment?
There are many reasons why investors in the UK will often search for the best healthcare stocks, which we elaborate on below.
Large-cap healthcare stocks – such as the likes of AstraZeneca and GlaxoSmithKline, are often viewed as ‘defensive’ companies. In stock market jargon, this simply means that they sell products and services that will always be in demand.
In other words, this is irrespective of how the wider economy is performing. As such, during economic uncertainties, the best healthcare stocks can protect your portfolio.
Easy to Diversify
There are hundreds of healthcare stocks listed in North America alone. When you factor in the UK, European, and Asian markets too, you have heaps of potential stocks to add to your healthcare portfolio.
As we briefly mentioned earlier, this doesn’t only include traditional pharmaceutical giants. On the contrary, the best healthcare stocks are also involved in sectors like research, cannabis, medical devices, and biotechnologies.
Many Stock Types to Choose From
Leading on from the section above, there are healthcare stocks to suit all financial goals and attitudes to risk. For example, if you are looking for high-grade, low-risk healthcare stocks, then you might turn to the likes of Johnson & Johnson or Novo Nordisk.
At the other end of the spectrum, if you’re seeking higher returns and prepared to take on more risk – there are plenty of growth stocks on the table. This includes the likes of GW Pharmaceuticals and Editas Medicine.
Large-Cap Healthcare Stocks Often Yield Dividends
One of the most preventable payers of regular, consistent dividends is that of the healthcare stock industry. As such, if you’re looking to build a diversified portfolio of healthcare dividend stocks, many of the companies discussed on this page will fit the bill.
In particular, Johnson & Johnson has increased the size of its quarterly dividend for almost six consecutive decades.
How to Choose the Best Healthcare Stocks for You
As noted above, there are potentially thousands of companies that sit within the remit of a healthcare stock. This is great for diversification purposes, albeit, too much choice can make it difficult to know which stocks to buy.
With this in mind, below you will find a list of key metrics to consider when searching for the best healthcare stocks in 2021.
- Consider the Risks: There is a huge disparity between the likes of AstraZeneca and Editas Medicine. While the former is a low-risk healthcare stock that can be considered strong and stable, the latter is behind an unproven business model. As such, you need to consider the risks of your chosen healthcare stock before making a purchase.
- Coronavirus: For as long as the coronavirus pandemic is with us, it’s wise to add some healthcare stocks that are behind specific products and services to help with treatment. This not only includes the vaccine itself but the likes of equipment producers and testing kit suppliers.
- Growth or Dividends: When investing in large-cap healthcare stocks like GlaxoSmithKline, the upside potential in terms of its share price is going to modest. To counter this, you should expect a regular dividend payment. On the other hand, up and coming healthcare innovators with unproven business models have the potential to generate huge stock price returns, but are unlikely to yield any dividends. As such, think about what your financial goals are before investing.
- Market: You also need to think about which marketplace you wish to target. For example, this page has discussed the best healthcare stocks from the US, UK, Denmark, and more. As a side tip, it’s worth buying healthcare stocks from various regions to aid your long-term diversification plan.
- Clinical Trials: Healthcare stocks – at least those in the pharmaceutical arena, live or die on the outcome of clinical trials. That is to say, the long and drawn-out process of getting a drug or treatment approved by the FDA can take many, many years. With that said, it’s worth looking to see which stocks are closed to winning regulatory approval on new products.
All in all, it’s crucial to do your own homework in your search for the best healthcare shares – as opposed to relying on third-party stock picks.
Best Healthcare Stock Brokers in the UK
It goes without saying that if you want to buy the best healthcare stocks in the UK, you need to find yourself a good broker. The provider not only needs to offer your chosen healthcare stocks, but it needs to offer competitive fees and commissions.
We have done the hard work for you by listing two of the best UK stock brokers to invest in the best healthcare stocks in 2021.
1. eToro – Buy Healthcare Stocks with 0% Commission
eToro is a top-rated stock broker that gives you access to over 100 leading healthcare stocks. This forms part of a much wider stock library that covers 2,400 shares from 17 UK and international markets. In fact, all of the best healthcare stocks that we have discussed today can be purchased at eToro with ease.
Best of all, this FCA-regulated broker does not charge any commissions or ongoing account fees. As an added bonus, you will also avoid paying the 0.5% stamp duty fee associated with FTSE 100 share purchases. eToro is also a great option if you are investing online for the very first time. This is because the platform was designed with newbies in mind.
You can easily deposit funds at eToro with a UK debit card, credit card, bank transfer, or e-wallet. Once you have opened an account – which usually takes less than 10 minutes, you can then buy your chosen healthcare stocks at a minimum investment of just $50. Additionally, eToro also offers a Copy Trading tool. This allows you to invest passively by mirroring the buy and sell orders of an expert stock trader. Finally, your funds at eToro are covered by the FSCS.
- Super user-friendly online trading platform
- Buy stocks without paying any commission or share dealing charges
- Trade CFDs in the form of stocks, indices, commodities, forex, and more
- 2,400+ stocks listed on the UK and international markets
- 150+ ETFs
- Deposit funds with a debit/credit card, e-wallet, or UK bank account
- Ability to copy the trades of other users
- FCA and FSCS protections
- Not suitable for advanced traders that like to perform technical analysis
67% of retail investors lose money trading CFDs at this site
2. DEGIRO – Great Low-Cost Broker With Hundreds of Healthcare Stocks
In terms of fees, this can vary wildly at Degiro depending on which stock exchange you are looking to access. For example, if buying the best healthcare stocks from the UK, the share dealing fee amounts to just £ 1.75 + 0.014% (£5 maximum).
If your chosen stocks are US-based, Degiro charges just € 0.50 + USD 0.004 per share. While UK and US stock purchases are very competitive, some markets are a bit expensive. For example, buying shares from companies in Australia or Singapore will cost you € 10.00 + 0.06% per trade.
- Very low fees to buy and sell stocks
- Thousands of stocks across multiple international markets
- One free ETF trade per month
- Also offers bonds and funds
- Good reputation
- Newly designed website makes it easy to invest
- Takes days to get your account set up
- Does not accept debit/credit cards or e-wallets
Investing at this trading platform involves risk of loss.
How to Buy Healthcare Stocks in the UK
So now that we have discussed the best UK share dealing platforms to buy healthcare stocks, we are now going to walk you through the investment process.
The steps below are based on buying Healthcare stocks at eToro, as the platform is 100% commission-free and regulated by the FCA.
Step 1: Open an Account and Upload ID
You will first need to open an account at eToro. You can do this by heading over the platform’s homepage and clicking on the ‘Join Now’ button.
Here you need to enter some personal information and contact details. You’ll also need to choose a username and password, and confirm your mobile number.
Step 2: Confirm Identity
If you are not planning to invest more than $2,250 (about £1,800) right now, you can skip the verification process and complete it later. However, as you’ll need to do this before a withdrawal can be requested, it’s best to get it out of the way now.
The two documents that you need to upload are as follows:
- Valid passport or driver’s license
- Utility bill or bank account statement
Step 3: Deposit Funds
You will need to make a deposit before you can buy your chosen healthcare stock.
You can do this with the following payment methods:
- Debit cards
- Credit cards
- E-wallets (Paypal, Skrill, or Neteller)
- Bank transfer
Step 4: Buy Healthcare Stocks
Once you have made a deposit, it’s then time to buy some healthcare stocks. The easiest way to do this is to just search for the company you wish to invest in. In our example, we are looking to buy shares in Moderna.
Then, you need to click on the ‘Trade’ button.
Finally, enter the amount you wish to invest ($50 minimum) and click on the ‘Open Trade’ button.
Your commission-free healthcare stocks will then be added to your eToro portfolio!
In summary, healthcare stocks are proving popular with UK investors. In this guide, we’ve discussed 10 potential healthcare stocks to invest in, but you should perform your own research nonetheless.
Nevertheless, with hundreds of stocks from dozens of niche sectors to choose from, you can easily buy a portfolio of top healthcare stocks.
Best of all, when using an FCA broker like eToro, you can buy your chosen shares commission-free. The platform also allows you to invest from just $50 per healthcare stock – which is great for diversifying.
You can buy healthcare stocks at eToro in less 10 minutes by clicking on the link below!
eToro – Buy Healthcare Stocks with 0% Commission
67% of retail investor accounts lose money when trading CFDs with this provider.
What is the best healthcare stock?
One of the best performing healthcare stocks of 2020 was Moderna - which saw its shares increase by over 800% in less than a year..
How do I invest in healthcare stocks UK?
To invest in healthcare stocks in the UK, all you need is an account with a top-rated broker. eToro offers over 2,400 commission-free stocks, many of which come from the healthcare industry.
What is the best healthcare stock for dividends?
Johnson & Johnson is probably the best healthcare stock for dividends. After all, the US firm has increased the size of its dividend for almost 60 consecutive years!
How do you buy international healthcare stocks in the UK?
Many brokers in the UK now give you access to international stocks. eToro, for example, offers shares from 17 different exchanges.
Are healthcare stocks good for a recession?
Although healthcare stocks might still go down in value in-line with a wider market drop, many are often resistant to a recession. This is because they are products and healthcare services that will always be in demand.