Personal health and wellness is one of the many secular tailwinds for healthcare companies. Shareholders who bet on the industry have been rewarded lately as healthcare stocks have returned 14.4% over the past six months, topping the S&P 500 by 4 percentage points.
Regardless of these results, investors must exercise caution as many businesses in this space are subject to heavy regulation that can influence their earnings potential. Taking that into account, here is one resilient healthcare stock at the top of our wish list and two best left ignored.
Two Healthcare Stocks to Sell:
CooperCompanies (COO)
Market Cap: $15 billion
With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ: COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services.
Why Does COO Fall Short?
- 7.3% annual revenue growth over the last two years was slower than its healthcare peers
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.3 percentage points
- ROIC of 5.1% reflects management’s challenges in identifying attractive investment opportunities
At $73.91 per share, CooperCompanies trades at 16.5x forward P/E. Check out our free in-depth research report to learn more about why COO doesn’t pass our bar.
Supernus Pharmaceuticals (SUPN)
Market Cap: $2.60 billion
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Do We Think SUPN Will Underperform?
- Sales trends were unexciting over the last two years as its 5.7% annual growth was below the typical healthcare company
- Subscale operations are evident in its revenue base of $681.5 million, meaning it has fewer distribution channels than its larger rivals
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Supernus Pharmaceuticals’s stock price of $45.32 implies a valuation ratio of 17.4x forward P/E. If you’re considering SUPN for your portfolio, see our FREE research report to learn more.
One Healthcare Stock to Buy:
HCA Healthcare (HCA)
Market Cap: $112 billion
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Are We Bullish on HCA?
- Dominant market position is represented by its $74.37 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Share repurchases over the last five years enabled its annual earnings per share growth of 21.2% to outpace its revenue gains
- Free cash flow margin jumped by 11.2 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
HCA Healthcare is trading at $491.23 per share, or 16.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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