While investing, not many are inclined toward the healthcare setup. However, what if we tell you that this particular industry is among the safest and high-rising options for gaining profit in your stock's margins? Yup! You heard us right: the healthcare stocks play a solid defensive play in times of uncertain economy. Moreover, these strong rising numbers have also appealed to many investors in recent times.

According to the statistics, health spending in the last quarter of 2019 accounted for almost 18% of the U.S. gross domestic product, and the U.S. healthcare spending totaled $4.4 trillion in 2022. All these values are also expected to grow by a drastic margin in the coming years. Are you interested and want to gain more insight into these stock options before you incline toward this completely new window? This article has you covered.

What are the Different Types of Healthcare Stocks?

Hopping into investing in the healthcare market is daunting, so it is essential to have a thorough understanding of what this particular industry offers. All stock markets are an accumulation of several different industries; the same is valid for healthcare.

There are several different forums in health care, from pharmaceuticals to health insurers, devices, and hospitals, and each forum operates with a different dynamic. While understanding each forum can be daunting in the initial stage of investing, knowing the four crucial and most invested subtypes is essential.

• Drug Stocks – investment in companies that develop and manufacture pharmaceuticals to fight and prevent diseases.
• Medical Devices Stocks – companies that work towards designing medical equipment and lab test instruments, which are most often used in research and development processes.
• Health Insurance Stocks – these include companies that offer healthcare plans for employers and customers to meet the cost of all healthcare services.
• Medical Service Provider Stocks – operators, companies, or healthcare providers that provide external healthcare services.

Advantages of Investing in Health Care Stocks

Understanding the advantageous or beneficial aspects of any investment and then deciding whether or not inclining toward it would be your best bet is an entirely natural approach. As a first-time investor in healthcare stocks, you might want to know the benefits you can reap if you do, too. We have a few of the best ones listed for you below:

Rise in the Aging Population and Baby Boomers

A large percentage of the current world population consists of an aging population and baby boomers who need healthcare services now and then. Hence, people will always make prescription drug purchase procedures and schedule trips to their doctors.

Steadier Returns in the Market

The healthcare market is growing, and no time on earth will come when people will not need healthcare. In light of this, it is safe to assume that the healthcare setup provides safe and consistent returns, unlike several other stocks.

The Healthcare Market is Growing Faster

Another great benefit of investing in healthcare is how quickly this market grows. Today's healthcare setup drastically differs from the one we knew two decades ago. The growth in this sector is anchored by technological advances and improved treatments, etc., and is believed to grow even more in the future.

The Graphs Show a Strong Sustained Growth

Health spending is estimated to grow by a drastic 5.4% through 2028, which would add up to a solid $6.2 trillion of the country's GDP. Hence, we can safely say that the graphs show strong sustained growth and will continue to do the same in the coming years.

The Top Healthcare Stocks to Invest in 2023

Now that you know the different subtypes of healthcare and the benefits you can achieve from investing in these stocks, we are sure you must be in search of the best healthcare stocks to invest in. If that is the case, then we have this aspect covered for you as well:

Pfizer Inc.

This name instantly clicks in your mind as the company that developed the Covid-19 vaccine and saved millions of lives worldwide. However, while saving the world from a pandemic is one of its highest achievements, this is not only what Pfizer's success is limited to. The global biopharmaceutical company has a versatile portfolio of drug products and an extensive line of candidates. Currently, the company has an estimated 19 drugs in the development pipeline and generate $20 billion in revenues by 2030. Hence, it is safe to say that Pfizer might be an excellent pick for investing in healthcare stocks.

Abbott Laboratories

Another great place to invest in healthcare stocks is this diverse healthcare company, which has successfully raised its dividends for 25 years straight. In the recent quarter, the company raised its quarterly dividend by 8.5%, from 47 cents per share to 51 cents on a 2% yield. According to many investing experts, the company's innovative and diverse business model, growing dividend, and strong balance sheet would help it outperform its stock market competitors.

Merck and Co. Inc.

Owning the title of one of the biggest pharmaceutical companies in the world, Merck and Co. has always strived on the positive inclination of the growth chart. The company has reported a 3% year-over-year revenue growth. The year 2023 has been exceptional for Merck, and 2024 is expected to grow even better. So, if you want to invest in the drug stock subtype, Merck might be an excellent option for you to pick.

Wrapping Up!

Investing in healthcare stock has massively risen in the recent trends of the stock market, and if you are someone who wants to test the waters of this forte, then we hope this article was helpful for you. Let us know your thoughts on investing in healthcare stocks, what you believe is the future growth, and which subtype you might be interested in investing in.