Investing in Health Care Companies: Our Top Picks

Looking to add some healthcare companies to your stock portfolio? In this post, we will recommend several companies that have long-term upside for investors that like to buy and hold.


1) CHA Medical Group

A holding company that has a controlling interest in various hospitals, clinics and research labs around California and South Korea, those looking to invest in a privately-held healthcare company will be well-served to park their money with CHA Medical Group.

Led by Chief Executive Officer Dr. Kwang Yul Cha, they began doing business in the United States of America with the acquisition of the Hollywood Presbyterian Medieval Center in 2005.

As an ownership group with a distinct sense of corporate social responsibility, those that are looking to make money in America’s private healthcare industry, but are looking to do so with a company that has a solid moral code will find investing in CHA Medical Group to be a good move.

2) Pfizer 

The pharmaceutical industry is another sector where healthcare investors can make big returns on their investment capital. In this space, one of the biggest players is Pfizer, who produces a number of popular drugs such as Lipitor (lowers cholesterol), Viagra (combats erectile dysfunction) and Celebrex (an anti-inflammatory) to patients located all over the world.

They have also been busying themselves with mergers and acquisitions activity in the past year, with their top deal seeing them acquire Allergen for a staggering $160 billion.

While some have expressed caution at such an ambitious deal, we view this lack of hesitancy to pull the trigger as a sign that the executive team of Pfizer sees great potential for growth in the coming years.

We rate this stock a buy.

3) Johnson & Johnson 

If you’re looking for a stock that Warren Buffett would be proud to buy and never sell, you will find few companies better than Johnson & Johnson in the healthcare space.

A well-diversified company that was founded over 130 years ago, they sell consumer goods that ranges from mouthwash to over the counter medications such as Tylenol and Benadryl, as well as a variety of pharmaceutical drugs and medical equipment.

With demand in the United States being stable, and a lot of growth possibilities in the developing world (with China being in their cross hairs), this is a solid blue chip company that should occupy a central position in your portfolio.

4) ResMed Inc. 

As the boomer generation continues to get older, a myriad of health issues will begin to affect them. One of the more annoying of these is sleep apnea, which is caused by irregularities in breathing as you sleep at night.

The resulting loud snorts and snores can be unbearable for your partner, and left untreated, it can increase the risk of heart attacks, strokes and diabetes in those affected.

At present, this niche is relatively small, meaning there are few competitors for companies like ResMed, who creates and markets medical equipment for the treatment of this disorder.

As our society continues to age, you can bet that this health issue will become more prominent, leading sufferers to seek out an effective solution.

The end result will be greatly increased profits for this company, so we recommend that you purchase this stock.