The Best Healthcare Stocks to Buy

Healthcare stocks appeal to investors for a few different reasons.

They are considered defensive, meaning they can hold up better than some other sectors during an economic slowdown.Demand for health-related products and services continues to rise as populations age.Healthcare companies tend to have high research and development spending, which can generate major improvements in treatment options.

In the year to date, the Morningstar US Healthcare Index rose 0.68%, while the Morningstar US Market Index lost 3.14%.

Read more: Biopharma Industry: Trump’s Executive Order Could Help Innovation, but Range of Scenarios Still Open

To come up with our list of the best healthcare stocks to buy now, we screened for:

Healthcare stocks that are undervalued, as measured by our price/fair value metric.Stocks that earn a wide Morningstar Economic Moat Rating. We think companies with wide economic moat ratings can fight off competitors for at least 20 years.Stocks that earn a Low, Medium, High, or Very High Morningstar Uncertainty Rating, which captures the range of potential outcomes for a company’s fair value.

These were the most undervalued healthcare stocks that Morningstar’s analysts cover as of May 2, 2025.

Pfizer PFEBio-Rad Laboratories BIOPhilips PHGThermo Fisher Scientific TMOGSK GSKWest Pharmaceutical Services WSTZimmer Biomet Holdings ZBHAgilent Technologies ADanaher DHRRoche RHHBYColoplast CLPBYMerck & Co. MRK

Here’s a little more about each of the best healthcare stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of May 2, 2025.

Pfizer

Morningstar Price/Fair Value: 0.58Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Drug Manufacturers – General

Drug manufacturer Pfizer is the cheapest stock on our list of the best healthcare stocks to buy. Pfizer is one of the world’s largest pharmaceutical firms, with annual sales close to $50 billion (excluding covid-19-related product sales). The stock is trading 42% below our fair value estimate of $42 per share.

Pfizer’s foundation remains solid, based on strong cash flows generated from a basket of diverse drugs. The company’s large size confers significant competitive advantages in developing new drugs. This unmatched heft, combined with a broad portfolio of patent-protected drugs, has helped Pfizer build a wide economic moat around its business.

Pfizer’s size establishes one of the largest economies of scale in the pharmaceutical industry. In a business where drug development needs a lot of shots on goal to be successful, Pfizer has the financial resources and the established research power to support the development of more new drugs. Also, after many years of struggling to bring out important new drugs, Pfizer is now launching several potential blockbusters in cancer and immunology.

Pfizer’s vast financial resources support a leading salesforce. Pfizer’s commitment to postapproval studies provides its salespeople with an armamentarium of data for their marketing campaigns. Further, leading salesforces in emerging countries position the company to benefit from the dramatically increasing wealth in nations such as Brazil, India, and China.

Pfizer’s 2020 move to divest its off-patent division Upjohn to create a new company (Viatris) in combination with Mylan should drive accelerating growth at the remaining innovative business. With limited patent losses and fewer older drugs, Pfizer is poised for steady growth (excluding the more volatile covid-19-related product sales) before a round of major patent losses hit in 2028.

We believe Pfizer’s operations can withstand eventual generic competition; its diverse portfolio of drugs helps insulate the company from any one particular patent loss. Following the merger with Wyeth several years ago, Pfizer has a much stronger position in the vaccine industry with pneumococcal vaccine Prevnar. Vaccines tend to be more resistant to generic competition because of their manufacturing complexity and relatively lower prices.

Read more about Pfizer here.

Bio-Rad Laboratories

Morningstar Price/Fair Value: 0.59Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: WideIndustry: Medical Devices

Bio-Rad Laboratories, headquartered in Hercules, California, develops, manufactures, and sells products and solutions for the clinical diagnostics and life sciences markets. Bio-Rad Laboratories is an affordable healthcare stock, trading at a 41% discount to our fair value estimate of $400 per share. The medical-device company earns a wide economic moat rating.

Bio-Rad develops products and solutions for the life sciences research and clinical diagnostic markets and enjoys niche market leadership in diagnostic quality controls, antigens, and digital polymerase chain reaction molecular testing. Bio-Rad’s business relies on the razor-and-blade model typically seen in the diagnostic market, and consumable reagents account for about 70% of total sales, with these reagents often sold at a higher margin than their associated equipment and instruments.

Bio-Rad’s strategy involves maintaining its current positioning in key markets such as blood typing and quality controls while capitalizing on strong demand for molecular diagnostics. It is also focused on improving operational efficiency, which has long lagged peers. In the longer term, Bio-Rad’s success will depend on whether the firm can successfully invest in research and development to maintain diagnostic specializations. We have a positive outlook for Bio-Rad, especially in clinical diagnostics, but the firm faces material competitive risks, particularly in molecular diagnostics, which is a competitive space.

Bio-Rad began investing in Sartorius in the early 2000s and owns approximately 33% of the combined ordinary and preferred shares. After subtracting deferred taxes, this investment constitutes approximately 40%-50% of our fair value estimate. Sartorius is a bioprocessing and life sciences supplier that specializes in single use technology used in biologics manufacturing, a business with attractive long-term growth prospects that enjoys strong regulatory barriers to entry and razor-and-blade switching costs. Although Bio-Rad does not own a controlling stake, this investment is highly material to our model valuation and the company’s share price. The majority of Sartorius shares are held by a family trust that expires in 2028. We expect no significant changes to Bio-Rad’s holding for at least the next few years.

Read more about Bio-Rad Laboratories here.

Philips

Morningstar Price/Fair Value: 0.66Morningstar Uncertainty Rating: HighMorningstar Economic Moat Rating: WideIndustry: Medical Devices

Next on our list of the best healthcare stocks to buy is Philips. Koninklijke Philips is a diversified global healthcare company operating in three segments: diagnosis and treatment, connected care, and personal health. The stock is trading at a 34% discount to our fair value estimate of $39 per share.

Philips is one of the leaders in imaging and image-guided therapies. But the company’s track record is checkered, with multiple self-induced missteps tarnishing its reputation and investor confidence. We believe the resolution of sleep care problems, focus on its high-performing areas, and new management team should be able change the narrative, but uncertainty remains.

Philips’ diagnosis and treatment segment, composed of imaging, ultrasound, and image-guided therapy lines, is a member of the Big Three, along with Healthineers and GE Healthcare. Philips lacks the scale and footprint of its larger peers in diagnostic imaging but has strong presence across other modalities and the product portfolio breadth that allows it to compete effectively. In imaging areas, such as cardiovascular IGT, cardiac ultrasound, and monitoring, Philips is the industry leader and should capitalize on many favorable trends in the industry. We expect global demand for imaging equipment and services to grow in midsingle digits over the next decade, driven by the demographic shifts, expanding healthcare access, and penetration of new customer channels. All three main industry participants stand to benefit from total addressable market growth and also greater share at the expense of smaller and more niche providers.

However, Philips’ performance has been problematic for a number of years, punctuated by the massive and prolonged struggles in sleep care. Litigation resolution in 2024 is the important step in rebuilding sleep care, but the pathway and the ability for Philips to claw back its market position remains highly uncertain.

Emphasis on profitability is key. The company’s operating margins have been decimated by the sleep care issues but also by significant component sourcing challenges and margin compression in imaging. Currently, Philips materially lags its imaging peers on profitability, and we don’t expect this gap to close soon. However, we do believe that the margins have bottomed and should improve. But Philips has a long way to go to restore investor trust.

Read more about Philips here.

Thermo Fisher Scientific

Morningstar Price/Fair Value: 0.67Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Diagnostics & Research

Thermo Fisher Scientific sells scientific instruments and laboratory equipment, diagnostics consumables, and life science reagents. Thermo Fisher Scientific is an affordable healthcare stock, trading at a 33% discount to our fair value estimate of $630 per share. The diagnostics and research firm earns a wide economic moat rating.

Thermo Fisher is weathering the pullback in global biopharmaceutical spending and China softness better than most of its peers. Being the premier life science supplier and having an unmatched portfolio of products, resources, and manufacturing capabilities have allowed the firm to retain and grow its wallet share among its customers across all channels. We expect the current budget-constrained environment to slowly ease in the upcoming year. Thermo Fisher remains in a great position to leverage its share gains in the biopharma channel and capitalize on strong long-term demand.

While bigger is not always better, Thermo Fisher had long committed itself to accumulate as robust a product offering, under one roof, as possible. To reach its ultimate goal of being a one-stop shop go-to provider of life science instruments and consumables, the company has spent aggressively throughout the years on internal efforts but particularly on acquisitions. More than $50 billion has been deployed since 2010 on this strategy (including the recent PPD acquisition), which, while accretive to the company’s reach, scale and product breadth, has historically suppressed its returns on invested capital to rather modest levels. Not anymore.

While the uplift from covid-19 tests and vaccines has been significant, the swiftness and extent of the company’s response has cemented Thermo Fisher’s integral role within the segment. The company has long found a receptive audience to its pitch with large pharma clients, which see sizable benefits in the simplified procurement process Thermo Fisher offers. Accelerated by the pandemic, the critical supplier status has been extended to the firm by a much wider audience, including governments. We anticipate the firm’s penetration of all its customer channels to grow, aided by its expansion into contract research and manufacturing. We also think the company’s global reach will continue to resonate and its already strong presence within rapidly growing emerging markets to expand further.

Read more about Thermo Fisher Scientific here.

GSK

Morningstar Price/Fair Value: 0.67Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Drug Manufacturers – General

In the pharmaceutical industry, GSK ranks as one of the largest firms by total sales. The firm earns a wide economic moat rating, and the shares of its stock look 33% undervalued relative to our $58 fair value estimate.

As one of the largest pharmaceutical and vaccine companies, GSK has used its vast resources to create the next generation of healthcare treatments. The company’s innovative new product lineup and expansive list of patent-protected drugs create a wide economic moat, in our opinion.

The magnitude of GSK’s reach is evidenced by a product portfolio that spans several therapeutic classes. The diverse platform insulates the company from problems with any single product. Additionally, the company has developed next-generation drugs in respiratory and HIV areas that should help mitigate both branded and generic competition. We expect GSK to be a major competitor in respiratory, HIV, and vaccines over the next decade.

On the pipeline front, GSK has shifted from its historical strategy of targeting slight enhancements toward true innovation. Also, it is focusing more on oncology and immunology, with genetic data to help develop the next generation of drugs. The benefits of these strategies are showing up in GSK’s early-stage drugs. We expect this focus will improve approval rates and pricing power. In contrast to respiratory drugs, treatments for cancer indications carry much stronger pricing power with payers.

We think GSK’s decision to divest the consumer business is likely to unlock value over the long run. GSK divested Haleon, its consumer group, in July 2022. Given the strong valuations of consumer healthcare companies, we expect this unit will yield a stronger valuation than what was implied within the company’s structure before the divestment.

Read more about GSK here.

West Pharmaceutical Services

Morningstar Price/Fair Value: 0.68Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Medical Instruments & Supplies

West Pharmaceutical Services is based in Pennsylvania and is a key supplier to firms in the pharmaceutical, biotechnology, and generic drug industries. Trading 32% below our fair value estimate, West Pharmaceutical Services has an economic moat rating of wide. We think shares of this stock are worth $310 per share.

West Pharmaceutical Services is the global market leader in primary packaging and delivery components for injectable therapeutics. Primary packaging has direct contact with the drug product and must be manufactured to ensure stability, purity, and sterility of the drug product in accordance with strict regulatory standards. Because of the mission-critical nature of these components, it is important for customers to trust the quality of manufacturing and design. Key product lines include elastomer components such as stoppers, seals, and plungers, Daikyo Crystal Zenith vials made out of polymer instead of glass, and auto-injectors. Injectables includes not only older modalities like small molecule drugs, insulin, and vaccines but also biologics and GLP-1 obesity drugs.

West has roughly 70% market share of elastomer components for injectable drugs, with the remaining 30% split between Switzerland’s Datwyler and narrow-moat AptarGroup. Additionally, its polymer vials are important containment solutions for biologics, a significant part of the injectables market, because protein therapeutics are incompatible with glass.

West’s strong market share is backed by its reputation for quality and supply chain expertise and reinforced by the high cost of failure for injectable drug packaging, especially biologics. The firm’s scale and diversified supply chain are unparalleled. We believe West will be able to maintain strong market share in the injectables components market.

The main driver of the company’s long-term revenue outlook is the growth of the injectables market, which enjoys secular growth trends due to increasing use of biologics. GLP-1 drugs are also a potential source of upside. Additionally, we think the company will continue to benefit from stricter regulations requiring higher-quality, lower particulate packaging, which is an incentive for customers to upgrade from standard primary components to West’s high value products, or HVP. We think this mix shift toward higher-margin products will gradually improve the firm’s profit margins, although high customer concentration adds uncertainty to our outlook.

Read more about West Pharmaceutical Services here.

Zimmer Biomet Holdings

Morningstar Price/Fair Value: 0.68Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Medical Devices

Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive implants as well as supplies and surgical equipment for orthopedic surgery. Zimmer Biomet Holdings is an affordable healthcare stock, trading at a 32% discount to our fair value estimate of $150 per share. The medical-device company earns a wide economic moat rating.

Zimmer Biomet is the undisputed king of large-joint reconstruction, and we expect aging baby boomers and improving technology suitable for younger patients to fuel solid demand for large-joint replacement that should offset price declines. Zimmer stumbled into a series of pitfalls in 2016-17, including integration issues, supply and inventory challenges, and quality concerns. The firm’s efforts to turn itself around have been admirable, though the pandemic slowed progress. Now Zimmer is seeking to capitalize on the normalization of procedure volume and placements of its Rosa robot.

Zimmer’s strategy is two-pronged. First, it is focused on cultivating close relationships with orthopedic surgeons who make the brand choice. High switching costs and high-touch service keep the surgeons closely tied to their primary vendor. This close relationship and vendor loyalty also help explain why market share shifts in orthopedic implants are glacial, at best. As long as Zimmer can launch comparable technology within a few years of its rivals, it can remain in a strong competitive position. Nevertheless, we think surgeon influence will inevitably erode, as the practice of medicine changes in response to healthcare reform. Over the long term, it will be more difficult for surgeons to run private practices profitably, and more of them will be open to employment at hospitals.

Second, the firm aims to accelerate growth through innovative products and improved execution. The latter is critical, in our view, to realizing the firm’s potential. Despite a range of structural competitive advantages, Zimmer Biomet in 2016-18 failed to shine in operations, which dragged down returns. Former CEO Bryan Hanson delivered substantial signs of progress. Now, new CEO Ivan Tornos must continue progess on Rosa robot placements (especially in outpatient settings), related consumable product pull-through, and expansion of the firm’s digital portfolio. Additionally, we anticipate the firm will flex its advantage in key areas, including extremities, trauma, and collaborations that involve sensor and digital technologies to improve surgical workflow.

Read more about Zimmer Biomet Holdings here.

Agilent Technologies

Morningstar Price/Fair Value: 0.72Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Diagnostics & Research

Originally spun out of Hewlett-Packard in 1999, Agilent has evolved into a leading life science and diagnostic firm. Trading 28% below our fair value estimate, Agilent Technologies has an economic moat rating of wide. We think shares of this stock are worth $151 per share.

Agilent focuses on providing tools to analyze the structural properties of various chemicals, molecules, and cells. The company is one of the leading providers of chromatography and mass spectrometry tools, which have applications in a variety of end markets, including the healthcare, chemical, food, and environmental fields. While healthcare-related applications, including clinical diagnostics, remain Agilent’s largest end market, Agilent generates about half of its sales from nonhealthcare fields.

Agilent’s strategy revolves around placing analytical instruments and informatics with relevant customers and then providing related services and consumables such as chromatography columns and sample preparation tools, which account for the rest of Agilent’s sales. About half of Agilent’s sales recur naturally. However, even instrument sales can be relatively sticky at the end of the instrument’s life cycle, especially in the highly regulated biopharmaceutical end market (over 35% of Agilent’s sales) and some of its other applications where intensive, time-consuming training is required to master the scientific analysis. Agilent aims to increase its exposure to these sticky customer relationships.

Overall, we think top-tier positions in most end markets, innovation, marketing operations, and ongoing cost controls should help Agilent grow revenue in the midsingle digits compounded annually and boost margins overall during our five-year forecast period. Overall, we expect mid- to high-single-digit earnings growth from Agilent, organically and with some share repurchases. While internal growth opportunities look solid, acquisitions could add to its bottom-line growth prospects, as well.

Read more about Agilent Technologies here.

Danaher

Morningstar Price/Fair Value: 0.74Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Diagnostics & Research

In 1984, Danaher’s founders transformed a real estate organization into an industrial-focused manufacturing company. Danaher is an affordable healthcare stock, trading at a 26% discount to our fair value estimate of $270 per share. The diagnostics and research firm earns a wide economic moat rating.

Through its Danaher Business System, Danaher aims for continuous improvement of its scientific technology portfolio by seeking out attractive markets and then making acquisitions to enter or expand within those fields and also divesting assets that are no longer seen as core, such as the recently divested Veralto operations. After acquisitions, Danaher aims to accelerate core growth at acquired companies by making research and development and marketing-related investments. It also implements lean manufacturing principles and administrative cost controls to boost operating margins. Overall, we appreciate Danaher’s strategic moves, which have pushed it into attractive end markets with strong growth prospects and sticky, recurring revenue streams.

The company’s acquisition-focused strategy has contributed to it becoming a top-five player in the highly fragmented and relatively sticky life science and diagnostic tool markets about 20 years after its first acquisition in the space (Radiometer in 2004). Recent life science and diagnostic acquisitions have included Beckman Coulter, Pall, and Cepheid. In early 2020, Danaher completed the acquisition of GE Biopharma, now called Cytiva, which fills in some gaps for Danaher within the biopharmaceutical development and manufacturing tool market. We find that life science end market particularly attractive given its strong growth trajectory, high margins, and high switching costs associated with regulatory and reproducibility concerns of end users. Management has started making more acquisitions in that space, such as Aldevron, and we would expect more tuck-in acquisitions in this and other end markets.

Danaher also continues to prune its portfolio of businesses. The recent divestiture of its environmental and applied solutions group (now called Veralto) is just the latest for the company that distributed shares in the now publicly traded Fortive Corp (industrials) in 2016 and Envista (dental) in 2019 directly to shareholders. More divestitures are possible in the future, as well.

Read more about Danaher here.

Roche

Morningstar Price/Fair Value: 0.75Morningstar Uncertainty Rating: LowMorningstar Economic Moat Rating: WideIndustry: Drug Manufacturers – General

Roche is a Swiss biopharmaceutical and diagnostic company. The firm earns a wide economic moat rating, and the shares of its stock look 25% undervalued relative to our $55 fair value estimate.

We think Roche’s drug portfolio and industry-leading diagnostics conspire to create maintainable competitive advantages. As the market leader in both biotech and diagnostics, this Swiss healthcare giant is in a unique position to guide global healthcare into a safer, more personalized, and more cost-effective endeavor. Strong information sharing continues between Genentech and Roche researchers, boosting research and development productivity and personalized medicine offerings that take advantage of Roche’s diagnostic expertise.

Roche’s biologics focus and innovative pipeline are key to the firm’s ability to maintain its wide moat and continue to achieve growth as current blockbusters face competition. Blockbuster cancer biologics Avastin, Rituxan, and Herceptin are seeing strong headwinds from biosimilars. However, Roche’s biologics focus (more than 80% of pharmaceutical sales) provides some buffer against the traditional intense declines from small-molecule generic competition. In addition, with the launch of Perjeta in 2012, Kadcyla in 2013, and Phesgo (a subcutaneous coformulation of Herceptin and Perjeta) in 2020, Roche has somewhat refreshed its breast cancer franchise. Gazyva, approved in CLL and NHL and in testing in lupus, as well as new bispecific antibodies Columvi and Lunsumio will also extend the longevity of the Rituxan blood cancer franchise. Roche’s immuno-oncology drug Tecentriq launched in 2016, and we see peak sales potential above $5 billion. Roche is also expanding outside of oncology with MS drug Ocrevus ($9 billion peak sales) and hemophilia drug Hemlibra ($6 billion peak sales). More recent deals have brought rights to promising development programs in immunology (Televant’s TL1A) and cardiometabolic (Carmot’s diabetes and obesity programs).

Roche’s diagnostics business is also strong. With a 20% share of the global in vitro diagnostics market, Roche holds the number-one rank in this industry over competitors Siemens, Abbott, and Ortho. Pricing pressure has been intense in the diabetes-care market, but new instruments and immunoassays have buoyed the core professional diagnostics segment.

Read more about Roche here.

Coloplast

Morningstar Price/Fair Value: 0.75Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Medical Instruments & Supplies

Coloplast is a leading global competitor in ostomy management and continence care. The firm earns a wide economic moat rating, and the shares of its stock look 25% undervalued relative to our $14.10 fair value estimate.

Based in Denmark, Coloplast is a leader in global ostomy and continence care. The firm has made inroads into the concentrated urology and fragmented woundcare markets, but it remains a peripheral player there. In contrast, Coloplast has a long record of consistent and meaningful innovation in ostomy and continence care that has led to a dominant position in Europe and growth in the US. Since 2008, the firm has done an admirable job of trimming its cost structure as it focused on profitable growth. After shifting the majority of its production to Hungary, China, and Costa Rica, Coloplast now enjoys a gross margin that beats that of rival Convatec by more than 1,500 basis points. Currently, Coloplast is altering its emphasis to enhance growth by entering new geographies, with an emphasis on the United States.

We’ve long been impressed with the firm’s ability to provide thoughtful, user-friendly improvements to its ostomy and intermittent catheters, which have won over end users. Most recently, Coloplast has upped its game with the incorporation of more sophisticated technology in its supplies and corresponding investment in clinical studies to demonstrate the value of these improvements. For example, new intermittent catheter Luja empties the bladder more fully to reduce the risk of urinary tract infections.

We are less keen on Coloplast’s woundcare segment, where competitive product launches abound. Coloplast’s woundcare portfolio had historically centered on low-tech foam, leaving the firm more vulnerable as advanced woundcare has moved toward hydrofiber and antibacterial products. Further, as with all competitors in this market, Coloplast faces relatively low switching costs for customers. Additionally, the majority of woundcare products are sold to providers (versus directly to patients themselves), which means there is greater pricing pressure from group purchasing organizations and government-sponsored tenders. However, Coloplast’s acquisition of Kerecis puts the firm in a strong position to compete in the fast-growing biologic wound care niche with its unique fish skin therapies.

Read more about Coloplast here.

Merck & Co.

Morningstar Price/Fair Value: 0.75Morningstar Uncertainty Rating: MediumMorningstar Economic Moat Rating: WideIndustry: Drug Manufacturers – General

Drug manufacturer Merck & Co. rounds out our list of best healthcare stocks to buy. Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. The stock is 25% undervalued relative to our fair value estimate of $111 per share.

Merck’s combination of a wide lineup of high-margin drugs and a pipeline of new drugs should ensure strong returns on invested capital over the long term. Further, following the divestment of the Organon business in June 2021, the remaining portfolio at Merck holds a higher percentage of drugs with strong patent protection. On the pipeline front, after several years of only moderate research and development productivity, Merck’s drug development strategy is yielding important new drugs.

Merck’s new products have mitigated the generic competition, offsetting the recent major patent losses. In particular, Keytruda for cancer represents a key blockbuster with multi-billion-dollar potential: It holds a first-mover advantage in one of the largest cancer indications of non-small cell lung cancer with excellent clinical data. Also, we expect new cancer drug combinations will further propel Merck’s overall drug sales. However, we expect intense competition in the cancer market, with several competitive drugs likely to report important clinical data over the next couple of years in earlier stage cancer settings. Other headwinds include generic competition, notably to diabetes drug Januvia, but potentially not until 2026 in the US.

After several years of mixed results, Merck’s R&D productivity is improving as the company shifts more toward areas of unmet medical need. Owing to side effects or lack of compelling efficacy, Merck experienced major setbacks several years ago with cardiovascular disease drugs anacetrapib, Tredaptive, Rolofylline, and TRA along with telcagepant for migraines. Safety questions ended the development of osteoporosis drug odanacatib. Despite these setbacks, Merck has some solid successes, including a successful launch for its PD-1 drug Keytruda in oncology. Following on this success, Merck is shifting its focus toward areas of unmet medical need in specialty-care areas, and Keytruda is leading this new direction. We expect Keytruda’s leadership in non-small cell lung cancer and several other cancers will be a key driver of growth for the firm over the next several years, but the 2028 US patent loss on the drug will create eventual pressure.

Read more about Merck & Co. here.

How to Find More of the Best Healthcare Stocks to Buy

Investors who’d like to extend their search for top healthcare stocks can do the following:

Review Morningstar’s comprehensive list of healthcare stocks to investigate further.Stay up to date on the healthcare sector’s performance, key earnings reports, and more with Morningstar’s healthcare sector page.Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.Use the Morningstar Investor screener to build a shortlist of healthcare stocks to research and watch.

More of the Best Stocks to Buy