The global aging population is rising swiftly, leading to an increase in chronic illnesses linked to old age. The trend is fueling a surge in demand for medical treatments, driving significant growth in the healthcare industry. As new treatments and cures emerge, the sector’s potential for future expansion is stronger than ever.

Thus, investors may find opportunities in stable healthcare stocks, AbbVie Inc. (ABBV), Medtronic plc (MDT), and Centene Corporation (CNC). These companies are well-positioned to leverage the rising demand for age-related healthcare services, setting them up to benefit from the growing aging demographic’s unique needs.

A report by the Urban Institute projects that Americans aged 65 and older will more than double, reaching 80 million by 2040. This demographic shift is accompanied by an increase in chronic illnesses, presenting challenges but also opportunities for healthcare providers to address these needs with specialized treatments and services.

Recent innovations in pharmaceuticals are remarkable, with the U.S. Food and Drug Administration approving more drugs for chronic conditions. These advancements are helping to extend life expectancy, thus contributing to a growing elderly population in need of sustained healthcare support, fueling industry growth further.

Moreover, the industry is undergoing a technological transformation. Developments in AI, precision medicine, and wearable health tech are improving patient care, increasing efficiency, and reducing disparities in healthcare access. These advancements are pivotal in meeting the needs of an expanding older population and enhancing outcomes for all patients.

Pharmaceutical companies stand to gain considerably from these trends. Statista projects the U.S. pharmaceutical market will reach a volume of $791.3 billion by 2029, growing at a CAGR of 4.7%. This growth highlights the sector’s promising future amid increasing demand for age-related healthcare solutions.

Against this backdrop, let us dive deep into the fundamentals of three healthcare stocks, starting with #3.

Stock #3: AbbVie Inc. (ABBV)

ABBV researches, develops, manufactures, and sells medicines and therapies. The company’s extensive product range includes treatments across Immunology, Oncology, Neuroscience, Eye Care, Aesthetics, and other specialties.

On October 31, ABBV partnered with EvolveImmune Therapeutics to advance multispecific biologics targeting various oncology areas. The collaboration uses EvolveImmune’s T-cell engager platform, helping ABBV strengthen its oncology portfolio by developing innovative antibody-based therapies for both solid tumors and hematologic cancers.

On October 28, ABBV announced plans to acquire Aliada Therapeutics, gaining access to Aliada’s unique blood-brain barrier-crossing technology. This acquisition allows ABBV to target complex central nervous system diseases, supporting growth by expanding its pipeline in high-need therapeutic areas and bolstering innovation in central nervous system (CNS) treatments.

For the fiscal third quarter that ended on September 30, 2024, ABBV’s net revenues increased 3.8% year-over-year to $14.46 billion. Its operating earnings rose 68% from the prior year’s quarter to $3.83 billion. Additionally, the company’s adjusted earnings after tax and adjusted EPS grew 1.5% and 1.7% from their year-ago values to $5.33 billion and $3.00, respectively.

Analysts expect ABBV’s revenue and EPS for the fiscal fourth quarter (ending December 2024) to increase 3.5% and 6.7% year-over-year to $14.81 billion and $2.98, respectively. Moreover, the company topped the consensus revenue estimates in all four trailing quarters.

ABBV’s stock has increased by 23.6% over the past six months and 42.5% over the past year to close the last trading session at $201.20.

ABBV’s POWR Ratings mirror its strong fundamentals. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

ABBV has a B grade for Growth, Value, Sentiment, and Stability. It is ranked #2 out of 161 stocks in the Medical – Pharmaceuticals industry.

In addition to the POWR Ratings we’ve stated above, we also have ABBV ratings for Momentum and Quality. Get all ABBV ratings here.

Stock #2: Medtronic plc (MDT)

MDT, based in Galway, Ireland, develops, manufactures, and distributes medical therapies. The company supplies healthcare systems, physicians, clinicians, and patients with device-based solutions across four segments: the Cardiovascular Portfolio; Neuroscience Portfolio; Medical Surgical Portfolio; and Diabetes Operating Unit.

On October 24, MDT received approval from the United States Food and Drug Administration for the Affera™ Mapping and Ablation System with Sphere-9™ Catheter. This all-in-one system, designed for treating persistent atrial fibrillation and atrial flutter, positions MDT as the only company offering two pulsed field ablation technologies for atrial fibrillation.

On September 25, MDT launched several new software, hardware, and imaging innovations to enhance AiBLE™, its smart ecosystem. These advancements combine navigation, robotics, data, artificial intelligence, and imaging to improve outcomes in spine and cranial procedures, positioning MDT as a leader in surgical technology innovation.

For the fiscal 2025 first quarter that ended July 26, 2024, MDT’s net sales increased 2.8% year-over-year to $7.92 billion. Its non-GAAP operating profit grew 2.3% from the prior year’s quarter to $1.95 billion. Moreover, the company’s net income attributable to MDT and EPS rose 31.7% and 35.6% from the year-ago values to $1.04 billion and $0.80, respectively.

Street expects MDT’s revenue and EPS for the fiscal year ending April 2025 to increase 3.8% and 4.9% year-over-year to $33.60 billion and $5.45, respectively. Moreover, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.

MDT’s shares have gained 10.2% over the past six months and 22.7% over the past year, closing the last trading session at $90.11.

MDT’s solid prospects are projected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

MDT has a B grade for Stability and Sentiment. It is ranked #21 out of 138 stocks in the Medical – Devices & Equipment industry.

Click here to access MDT’s ratings for Quality, Momentum, Value, and Growth.

Stock #1: Centene Corporation (CNC)

CNC provides essential healthcare programs and services to underinsured and uninsured families, commercial organizations, and military families across the United States. The company operates through Medicaid; Medicare; Commercial; and Other segments.

On May 2, CNC’s Medicare business, Wellcare, partnered with Wellvana to expand affordable, patient-centered primary healthcare for Medicare Advantage members in Georgia, Tennessee, and Texas. The collaboration supports independent primary care physicians, improves clinical outcomes, and strengthens CNC’s presence in value-based care, driving growth in its Medicare sector.

For the fiscal third quarter that ended September 30, 2024, CNC’s total revenues increased 10.5% year-over-year to $42.02 billion. The net earnings and earnings per common share attributable to CNC grew 52% and 56.3% from the prior year’s quarter to $713 million and $1.36, respectively.

The consensus revenue estimate of $161.28 billion for the fiscal year ending December 2024 reflects a year-over-year rise of 4.7%. Its EPS for the same period is expected to increase 2.3% from the prior year to $6.83. Also, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.

Shares of CNC marginally declined over the past five days to close the last trading session at $62.56.

CNC’s POWR Ratings reflect its sound outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

CNC has a B grade for Value and Growth. Out of 10 stocks in the B-rated Medical – Health Insurance industry, CNC is ranked #2.

To check CNC’s Quality, Momentum, Sentiment, and Stability ratings, click here.

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ABBV shares were unchanged in premarket trading Thursday. Year-to-date, ABBV has gained 34.58%, versus a 25.52% rise in the benchmark S&P 500 index during the same period.

About the Author: Aanchal Sugandh

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns. More...

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