Healthcare Business

Why 5 Lagging Health Care Giants May Be Incredible Buys Now

Lee Jackson

Becton Dickinson

This top health care stock is a solid and safer play now. Becton Dickinson and Co. (NYSE: BDX) is a diversified global medical technology company that produces medical devices, instrument systems and reagents for the health care, life sciences research, clinical, diagnostic and pharmaceutical markets.

The company has grown into a large medical conglomerate with over 49,000 employees covering nearly 50 countries worldwide. The CareFusion acquisition significantly expanded the company’s medical technology footprint in infusion and medication management.

Shareholders are paid a 1.37% dividend. The $285 Jefferies price target compares with the $269.89 consensus target and the most recent close at $225.04 a share.

Gilead Sciences

This company is trading at a very reasonable 9.55 times estimated 2019 earnings. Gilead Sciences Inc. (NASDAQ: GILD) is a biopharmaceutical company that discovers, develops and commercializes therapies for the treatment of HIV/AIDS, liver disease, cancer and inflammation. The acquisition of Kite Pharmaceutical in 2017 allowed for entry into the CAR-T space, indicating a renewed focus in oncology.

The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread and Hepsera products for the treatment of liver disease.

Gilead Sciences investors are paid an outstanding 4.07% dividend. Jefferies has set its price objective at $95. The posted consensus target price is lower at $81.35. The stock closed at $61.87 on Monday.

Quest Diagnostics

With an aging population, this may be a safer way for investors to play health care. Quest Diagnostics Inc. (NYSE: DGX) is the largest provider of clinical diagnostic testing and related services in the United States, delivered through a national network of full-service clinical laboratories and over 2,200 patient service centers.

The company looks to be on track for at least 1% of incremental sales growth from mergers and acquisitions this year, and some on Wall Street feel there is a potential for additional acquisitions that could boost the second half outlook. Quest has indicated the first tranche of the anticipated United Healthcare share gain will happen quickly, but that a significant part of the volume build will span into 2021.

Investors receive a 2.49% dividend. The Jeffries price target is $107. That compares to the analysts’ consensus target of $92, as well as the latest closing share price of $85.18.

Stocks of these five top health care companies may be offering investors some solid value in what is a very richly priced stock market. With concerns over drug pricing, reimbursement and a host of other issues, the all-clear signal is hardly being sounded. However, the level these sector leaders are trading at offers some good entry points for long-term growth accounts with a degree of risk tolerance.