Last Updated on 17 August 2026
Introduction
Healthcare is one of the largest and most essential parts of the U.S. economy, making the best healthcare stocks to buy for long term an interesting area for investors looking beyond short-term market movements. People continue to need medicines, medical procedures, diagnostic testing, healthcare services, and medical technology regardless of whether the economy is expanding or slowing down.
That makes healthcare stocks particularly interesting for investors with a long-term perspective. However, the healthcare sector is much broader than pharmaceutical companies. It includes drug manufacturers, biotechnology companies, medical-device businesses, healthcare insurers, laboratory-equipment providers, and companies developing new medical technologies.
For investors researching the best healthcare stocks to buy for long term, the goal should not simply be to find the stock that has risen the most recently. A better approach is to identify businesses with durable competitive advantages, strong financial positions, attractive growth opportunities, and the ability to adapt to changes in medicine, regulation, and healthcare spending.
This article examines seven established U.S.-listed healthcare companies that can serve as starting points for long-term research: Eli Lilly, Johnson & Johnson, AbbVie, Merck, UnitedHealth Group, Thermo Fisher Scientific, and Intuitive Surgical.
These companies are not guaranteed winners or personalized investment recommendations. Stock valuations, financial results, competitive conditions, and industry trends change over time, so investors should review the latest company filings and valuation information before making an investment decision.
Why Healthcare Stocks Matter for Long-Term Investors
The long-term healthcare opportunity is supported by several structural trends.
The Centers for Medicare & Medicaid Services projects U.S. national health expenditures to grow at an average annual rate of 5.8% from 2024 through 2033, faster than projected nominal GDP growth of 4.3%. CMS also projects healthcare spending to rise from 17.6% of the U.S. economy in 2023 to 20.3% by 2033.
Several forces are behind this growth:
- An aging population
- Increasing demand for chronic-disease treatment
- Advances in biotechnology
- Growth in specialty medicines
- Expansion of medical technology
- Greater use of diagnostic testing
- Increasing healthcare spending
- New applications of artificial intelligence and automation
But healthcare investing also comes with unusual risks. A promising drug can fail a clinical trial. A successful medicine can eventually lose patent protection. Government policy can affect drug pricing and insurance businesses. Medical-device companies face regulatory requirements, while healthcare insurers can experience unexpected changes in medical costs.
That is why diversification and careful research are particularly important.
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Best Healthcare Stocks to Buy for Long Term
The following companies are worth researching because they represent different parts of the healthcare industry.
| Company | Ticker | Healthcare Segment | Long-Term Investment Theme |
|---|---|---|---|
| Eli Lilly | LLY | Pharmaceuticals | Diabetes, obesity and innovative medicines |
| Johnson & Johnson | JNJ | Pharmaceuticals & MedTech | Diversified healthcare exposure |
| AbbVie | ABBV | Pharmaceuticals | Immunology, neuroscience and aesthetics |
| Merck | MRK | Pharmaceuticals | Oncology and diversified drug portfolio |
| UnitedHealth Group | UNH | Health insurance & services | Healthcare services and insurance |
| Thermo Fisher Scientific | TMO | Life sciences | Research, diagnostics and biopharma services |
| Intuitive Surgical | ISRG | Medical technology | Robotic-assisted surgery |
1. Eli Lilly (LLY)
Eli Lilly is one of the most prominent pharmaceutical companies in the world and has become particularly important in the diabetes and obesity-treatment markets.
Its portfolio includes medicines such as Mounjaro and Zepbound, while the company continues to invest heavily in research and development.
The company’s long-term opportunity is tied to the enormous potential market for treatments addressing metabolic diseases. Obesity and type 2 diabetes affect large populations, creating substantial demand for effective therapies.
Eli Lilly reported $65.2 billion in 2025 revenue, compared with $45.0 billion in 2024. The company also spent more than $13 billion on research and development during 2025.
Why investors may find Eli Lilly interesting
The most obvious attraction is growth potential.
If the company successfully expands its existing medicines, develops additional treatments, and maintains its competitive position, earnings could potentially grow significantly over many years.
Lilly also has the resources to invest heavily in clinical research, manufacturing capacity, and new medicines.
Risks to consider
The biggest mistake would be assuming that strong drug sales automatically make the stock a good investment at any price.
Investors should consider:
- High expectations embedded in the valuation
- Competition from other pharmaceutical companies
- Patent and exclusivity risks
- Regulatory changes
- Clinical-trial failures
- Manufacturing capacity
- Pricing pressure
For long-term investors, the key question is not simply whether Lilly has good medicines. It is whether the company’s future growth justifies the price investors are paying for the stock.
2. Johnson & Johnson (JNJ)
Johnson & Johnson provides a different type of healthcare exposure.
The company operates through two major businesses: Innovative Medicine and MedTech. That diversification means investors are not relying entirely on one drug franchise.
In 2025, Johnson & Johnson generated approximately $94.2 billion in worldwide sales, with Innovative Medicine contributing $60.4 billion and MedTech contributing $33.8 billion.
Why Johnson & Johnson stands out
One of its biggest advantages is diversification.
The company participates in areas including:
- Prescription medicines
- Oncology
- Immunology
- Neuroscience
- Cardiovascular care
- Surgical technology
- Orthopedics
- Vision care
This gives J&J multiple sources of revenue and reduces dependence on a single product.
Long-term growth potential
The MedTech business provides exposure to an aging population and increasing demand for surgical procedures and medical technology.
At the same time, Innovative Medicine gives the company exposure to pharmaceutical innovation.
Risks
Johnson & Johnson is not immune to legal, regulatory, pharmaceutical, and competitive risks.
Investors should also monitor the company’s pharmaceutical pipeline and the performance of important medicines as patents and competition evolve.
The company is therefore more suitable for investors looking for diversified healthcare exposure rather than a pure high-growth pharmaceutical story.
3. AbbVie (ABBV)
AbbVie is another major pharmaceutical company and is particularly well known for its immunology portfolio.
The company’s long-term investment case is based on its ability to develop, acquire, and commercialize medicines across areas such as immunology, neuroscience, oncology, eye care, and aesthetics.
AbbVie has also had to manage the loss of exclusivity for Humira, one of the most successful drugs in pharmaceutical history.
That makes AbbVie an interesting example of why investors should look beyond a company’s most famous product.
Why AbbVie may appeal to long-term investors
AbbVie has attempted to diversify its business through newer medicines and acquisitions.
For investors, this creates an important question:
Can the company’s newer products replace revenue lost from older blockbuster drugs while continuing to grow overall earnings and cash flow?
That question is more useful than simply looking at historical performance.
AbbVie publishes its annual reports and regulatory filings, including its 2025 Form 10-K, through its investor-relations website.
Risks
AbbVie investors should watch:
- Patent expirations
- Biosimilar competition
- Drug-pricing regulation
- Clinical-trial outcomes
- Acquisition-related debt
- Dependence on successful product launches
AbbVie may be particularly interesting to investors who want pharmaceutical exposure with a significant focus on cash generation and shareholder returns, but valuation still matters.
4. Merck & Co. (MRK)
Merck is one of the world’s largest pharmaceutical companies and has a major presence in oncology.
Its Keytruda franchise has been a central component of the company’s pharmaceutical business, while Merck also operates in vaccines, animal health, and other healthcare markets.
Merck generated $65.0 billion in worldwide sales in 2025, compared with $64.2 billion in 2024.
Why Merck could be a long-term healthcare stock to research
Cancer treatment remains one of the most important areas of pharmaceutical research.
Companies with strong oncology portfolios can potentially benefit from:
- New indications
- Combination therapies
- Earlier-stage cancer treatment
- Expanding global markets
- Continued innovation
Merck’s diversified healthcare operations also provide some balance.
The major issue investors should watch
Merck demonstrates one of the most important principles of pharmaceutical investing:
A blockbuster drug eventually faces competitive and patent-related challenges.
Therefore, investors need to evaluate what comes after today’s biggest products.
A company can have excellent current earnings but still face a difficult future if its pipeline cannot replace products approaching loss of exclusivity.
5. UnitedHealth Group (UNH)
UnitedHealth Group gives investors exposure to a completely different part of healthcare.
Rather than primarily manufacturing medicines, UnitedHealth operates through healthcare benefits and services, including UnitedHealthcare and Optum.
UnitedHealthcare reported $344.9 billion in 2025 revenue, up 16% from 2024, although its operating margin declined substantially during the year.
That combination is important.
It demonstrates why investors should never evaluate a healthcare company using revenue growth alone.
Why UnitedHealth is interesting
Healthcare insurance can provide recurring revenue because people and employers continue to need coverage.
UnitedHealth’s broader healthcare-services ecosystem also gives it exposure to areas such as pharmacy services, care delivery, analytics, and healthcare technology.
Risks
The insurance business can be considerably more complicated than pharmaceutical investing.
Important risks include:
- Rising medical costs
- Government reimbursement changes
- Medicare Advantage trends
- Regulatory scrutiny
- Healthcare utilization
- Cybersecurity
- Political and policy changes
UnitedHealth is therefore an example of a healthcare stock where investors need to study operating margins, medical-cost trends, membership, cash flow, and regulatory developments rather than focusing only on revenue.
6. Thermo Fisher Scientific (TMO)
Thermo Fisher Scientific is one of the most interesting ways to gain exposure to the infrastructure behind healthcare and biotechnology.
The company supplies scientific instruments, laboratory products, diagnostics, and biopharma services.
That means Thermo Fisher can benefit from research activity even when it is not the company developing the final medicine.
Thermo Fisher generated $44.56 billion in revenue in 2025, up 4% from 2024, while full-year GAAP diluted EPS increased 7%.
Why TMO may have long-term potential
The company benefits from several long-term trends:
- Growth in pharmaceutical research
- Biotechnology innovation
- Diagnostic testing
- Drug development
- Laboratory automation
- Increasing scientific complexity
This is an important distinction.
Instead of trying to predict which individual drug will succeed, an investor in Thermo Fisher is investing in the broader ecosystem that supports scientific research and drug development.
Risks
Thermo Fisher can be affected by research budgets, pharmaceutical capital spending, government funding, laboratory demand, and economic cycles.
Its acquisition strategy and valuation also deserve attention.
For investors looking for best healthcare stocks for long-term growth beyond traditional pharmaceutical companies, TMO is an interesting company to research.
7. Intuitive Surgical (ISRG)
Intuitive Surgical is a medical-technology company best known for its da Vinci robotic-assisted surgery systems.
The company’s business model differs significantly from that of pharmaceutical companies.
Instead of earning primarily from prescription drugs, Intuitive generates revenue from surgical systems, instruments, accessories, and services.
In 2025, Intuitive Surgical generated approximately $10.1 billion in revenue, representing 21% growth from 2024. Its customers performed more than 3.2 million procedures using its products, while da Vinci procedures increased 18%.
Why Intuitive Surgical is interesting
Robotic-assisted surgery could become increasingly important as hospitals adopt technologies designed to improve surgical precision and efficiency.
The company’s recurring revenue from instruments and accessories is particularly important because hospitals that use robotic systems need compatible consumables for procedures.
That creates a business model different from a one-time medical-equipment sale.
Risks
The main risks include:
- High valuation
- Hospital capital-spending cycles
- Regulatory changes
- Competition
- Procedure growth slowing
- Dependence on continued technological leadership
ISRG can therefore be attractive to investors seeking exposure to medical technology and healthcare innovation, but valuation discipline is particularly important.
How to Evaluate Healthcare Stocks for Long-Term Investment
Finding the best healthcare stocks to buy for long term requires more than creating a list of famous companies.
Here are some of the most important factors to examine.
1. Revenue Growth
Look at revenue over several years rather than focusing on one quarter.
Consistent growth can indicate that demand for the company’s products or services is expanding.
However, revenue growth should always be examined alongside profitability and cash flow.
2. Earnings and Free Cash Flow
A healthcare company may have impressive revenue growth but still struggle to generate cash.
Look at:
- Operating income
- Net income
- Operating cash flow
- Free cash flow
- Capital expenditures
For pharmaceutical companies, also examine research and development spending because future growth often depends on successful R&D.
3. Competitive Advantage
Ask what prevents competitors from taking the company’s customers.
Potential advantages include:
- Patents
- Brand recognition
- Proprietary technology
- Regulatory approvals
- Distribution networks
- Switching costs
- Economies of scale
- Research capabilities
A strong competitive advantage can help a company maintain profitability over long periods.
4. Product Pipeline
For pharmaceutical and biotechnology companies, the future pipeline can be as important as current products.
Ask:
- What drugs are in development?
- Which clinical stages are they in?
- What diseases do they target?
- How large are the potential markets?
- What happens if a major trial fails?
Never assume that an experimental drug will become a successful commercial product.
5. Debt
Debt deserves special attention when evaluating healthcare companies.
Large acquisitions can create substantial debt, while pharmaceutical businesses may also face major spending requirements for research, manufacturing, and commercialization.
A strong balance sheet gives companies more flexibility during difficult periods.
6. Valuation
A great company can still be a poor investment if purchased at an excessive valuation.
Common valuation measures include:
- Price-to-earnings ratio
- Forward P/E
- Price-to-sales ratio
- Enterprise value-to-EBITDA
- Free-cash-flow yield
- Dividend yield
These figures should be compared with the company’s historical valuation and with appropriate industry peers.
Healthcare Stocks by Investment Style
Different healthcare stocks can suit different investment objectives.
| Investment Style | Companies to Research | Why |
|---|---|---|
| Higher-growth healthcare | Eli Lilly, Intuitive Surgical | Exposure to rapidly expanding healthcare markets |
| Diversified healthcare | Johnson & Johnson | Pharmaceuticals plus MedTech |
| Pharmaceutical income/growth | AbbVie, Merck | Established drug portfolios |
| Healthcare services | UnitedHealth | Insurance and healthcare services |
| Healthcare infrastructure | Thermo Fisher | Research, laboratory and biopharma ecosystem |
This is not a ranking or recommendation. It simply illustrates how different healthcare businesses can provide different types of exposure.
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Benefits of Investing in Healthcare Stocks
Essential Demand
Healthcare is not a discretionary industry in the same way as many consumer businesses.
People still need treatment, medication, diagnostics, and medical procedures during economic downturns.
Long-Term Demographic Trends
An aging population can increase demand for healthcare services and treatments.
Chronic conditions can also create recurring demand for healthcare products.
Innovation
Healthcare is constantly changing.
New drugs, medical devices, diagnostics, robotics, and biotechnology platforms can create entirely new markets.
Potential Defensive Characteristics
Some established healthcare businesses may have more stable demand than highly cyclical industries.
However, “defensive” does not mean “risk-free.”
Healthcare stocks can experience significant declines when earnings expectations, regulation, drug pipelines, or valuations change.
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Risks of Investing in Healthcare Stocks
Healthcare investing has several risks that beginners should understand.
Regulatory Risk
The healthcare industry is heavily regulated.
Changes in drug approval procedures, reimbursement, insurance rules, or pricing policy can affect profitability.
Clinical Risk
A drug that looks promising in early research may fail later.
Clinical development is uncertain, and investors can lose money when expected products fail to reach the market.
Patent Risk
Pharmaceutical companies can lose exclusivity on important medicines.
Generic and biosimilar competition can then reduce revenue.
Valuation Risk
Fast-growing healthcare stocks can trade at high valuations.
If growth slows, the stock price can decline even when the underlying company remains profitable.
Political Risk
Healthcare policy is politically sensitive in the United States.
Changes in drug pricing, Medicare, Medicaid, insurance regulations, or reimbursement can affect different companies in different ways.
Pros and Cons of Healthcare Stocks
Pros
- Essential products and services
- Long-term demand potential
- Strong innovation opportunities
- Exposure to demographic trends
- Many different subsectors
- Potential defensive characteristics
- Some companies have established dividend histories
Cons
- Regulatory uncertainty
- Patent expirations
- Clinical-trial failures
- High valuations in some growth stocks
- Political risk
- Complex business models
- Healthcare companies can behave very differently from one another
Who Should Consider Healthcare Stocks?
Healthcare stocks may be appropriate for investors who:
- Have a long investment horizon
- Understand stock-market volatility
- Want exposure to the healthcare sector
- Are comfortable researching individual companies
- Can tolerate periods of underperformance
- Prefer businesses with potentially durable demand
Investors should generally consider individual healthcare stocks as part of a diversified portfolio rather than treating one company as the foundation of their entire investment strategy.
Who Should Avoid Individual Healthcare Stocks?
Individual healthcare stocks may not be appropriate for investors who:
- Cannot tolerate significant volatility
- Need the invested money soon
- Do not want to research individual companies
- Are uncomfortable with clinical or regulatory risk
- Are looking for guaranteed returns
For investors who want healthcare exposure without selecting individual stocks, a diversified healthcare ETF may be worth researching.
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Common Mistakes when Investing in Healthcare Stocks
Mistake 1: Buying Because a Drug Is Popular
A popular medicine does not automatically make its manufacturer’s stock attractive.
Investors need to consider valuation, competition, patent life, and future products.
Mistake 2: Ignoring Valuation
Investors sometimes assume that a great company will automatically produce great investment returns.
The price paid matters.
Mistake 3: Looking Only at Revenue
Revenue can grow while margins decline.
Always examine profitability and cash flow.
Mistake 4: Ignoring Patent Expiration
For pharmaceutical companies, patent timelines can materially affect future revenue.
Mistake 5: Treating All Healthcare Stocks the Same
A pharmaceutical company, health insurer, medical-device manufacturer, and laboratory-services company have very different risk profiles.
Mistake 6: Chasing Recent Winners
A stock that has already risen substantially may have very high expectations embedded in its price.
Past performance does not guarantee future returns.
Practical Example: How a Beginner Could Research a Healthcare Stock
Suppose an investor is researching a pharmaceutical company.
Instead of immediately deciding whether to buy, the investor could follow this process:
Step 1: Understand the business
Find out what the company sells and which markets generate most of its revenue.
Step 2: Identify the major products
Determine whether the company depends heavily on one or two blockbuster medicines.
Step 3: Examine financial statements
Review revenue, operating income, cash flow, debt, and R&D spending.
Step 4: Study the pipeline
Look at medicines in clinical development and upcoming regulatory events.
Step 5: Check patent exposure
Determine when important products could face generic or biosimilar competition.
Step 6: Calculate valuation
Compare the company’s valuation with its own history and relevant competitors.
Step 7: Consider the downside
Ask what could go wrong.
This last step is often overlooked. A strong investment thesis should explain both why the company could succeed and what could invalidate the thesis.
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How to Build a Long-Term Healthcare Stock Watchlist
Rather than searching for one “perfect” healthcare stock, investors can build a watchlist across multiple subsectors.
For example:
- One pharmaceutical company
- One diversified healthcare company
- One medical-device company
- One healthcare-services company
- One life-sciences company
This approach can reduce dependence on one particular healthcare trend.
An investor could then monitor the companies quarterly and update the thesis as new financial results, regulatory developments, and product information become available.
Should You Invest in Healthcare Stocks for the Long Term?
Healthcare can be a compelling long-term sector because demand for medical treatment, medicines, diagnostics, and healthcare technology is likely to remain significant.
The sector also offers exposure to major structural trends, including aging demographics, biotechnology, precision medicine, robotics, and increasing healthcare expenditure.
However, not every healthcare company will benefit equally.
The difference between a successful long-term investment and a disappointing one can come down to valuation, competitive advantage, financial strength, product pipelines, regulatory developments, and execution.
Therefore, the best healthcare stocks to buy for long term should be viewed as companies worth researching rather than a fixed list of guaranteed winners.
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Frequently Asked Questions
What are the best healthcare stocks to buy for long term?
Some established healthcare companies worth researching include Eli Lilly, Johnson & Johnson, AbbVie, Merck, UnitedHealth Group, Thermo Fisher Scientific, and Intuitive Surgical. They operate in different healthcare subsectors and have different risk profiles, so investors should evaluate each company individually.
Are healthcare stocks good for long-term investment?
Healthcare stocks can be suitable for long-term investors because healthcare demand is supported by demographics, medical innovation, and ongoing healthcare spending. However, individual companies can experience substantial risks from regulation, competition, patents, clinical trials, and valuation.
What are the best healthcare stocks for long-term growth?
Investors seeking the best healthcare stocks for long-term growth may want to research companies with strong revenue opportunities, innovative products, large addressable markets, and sustainable competitive advantages. Eli Lilly and Intuitive Surgical are examples of companies with significant growth exposure, although their valuations and risks should be carefully evaluated.
Are pharmaceutical stocks risky?
Yes. Pharmaceutical stocks face clinical, regulatory, patent, pricing, and competitive risks. A failed clinical trial or unexpected regulatory decision can materially affect a company’s future earnings.
Should beginners invest in individual healthcare stocks?
Beginners can research individual healthcare stocks, but they should understand that individual stocks carry company-specific risks. Investors who prefer broader diversification may consider healthcare-focused ETFs or diversified index funds instead.
What should I look for in a healthcare stock?
Important factors include revenue growth, earnings, free cash flow, debt, competitive advantages, product pipelines, patents, regulatory exposure, valuation, and management execution.
Are healthcare stocks defensive stocks?
Some established healthcare businesses can have defensive characteristics because demand for healthcare remains relatively stable during economic downturns. However, healthcare stocks are not guaranteed to outperform during market declines.
How does an aging population affect healthcare stocks?
An aging population can increase demand for medicines, medical procedures, diagnostics, long-term care, and medical technology. The actual impact varies considerably by company and healthcare subsector.
Should I buy healthcare stocks when the market falls?
A market decline does not automatically make a healthcare stock attractive. Investors should determine whether the company’s underlying business remains strong and whether the valuation has become more reasonable.
Can healthcare stocks lose money?
Yes. Healthcare stocks can decline substantially. Risks include disappointing earnings, failed clinical trials, regulatory changes, patent expirations, lawsuits, competitive pressure, and broader market volatility.
Key Takeaways
- Healthcare is a large, essential, and potentially defensive part of the U.S. economy.
- The best healthcare stocks for long-term growth are not necessarily the stocks with the biggest recent gains.
- Pharmaceutical companies can offer significant growth but face patent and clinical-development risks.
- Medical-device and life-science companies can provide exposure to healthcare innovation without relying entirely on drug sales.
- Healthcare insurers can benefit from recurring demand but are highly sensitive to medical costs and government policy.
- Valuation matters even when the underlying business is excellent.
- Investors should consider a company’s revenue growth, cash flow, debt, competitive advantage, pipeline, and valuation.
- The seven companies discussed here represent different areas of healthcare rather than a single investment strategy.
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Final Thoughts
Healthcare remains one of the most important long-term industries in the United States.
The sector combines essential demand with significant opportunities in pharmaceuticals, biotechnology, medical devices, diagnostics, healthcare services, and scientific research. CMS expects U.S. healthcare spending to continue growing faster than GDP over the 2024–2033 period, providing an important long-term industry backdrop.
For investors researching the best healthcare stocks to buy for long term, companies such as Eli Lilly, Johnson & Johnson, AbbVie, Merck, UnitedHealth Group, Thermo Fisher Scientific, and Intuitive Surgical provide examples of very different approaches to healthcare investing.
But there is no universally “best” healthcare stock.
A strong long-term investor should focus on the quality of the underlying business, the durability of its competitive advantage, future growth opportunities, balance sheet, cash generation, regulatory environment, and-critically-the valuation being paid.
Financial figures such as revenue, earnings, valuation multiples, dividends, and other company metrics can change. Investors should verify the latest information in company filings and official investor-relations materials before making investment decisions.
The objective should not be to predict which healthcare stock will rise the most next year. It should be to identify businesses that have a reasonable chance of creating sustainable value over many years while understanding the risks that could make the investment thesis wrong.
Author’s Note: I’ve been investing in mutual funds and stocks since 2018 and have practical experience in business and personal finance. While I’m not a licensed financial advisor or investment professional, I write educational content based on years of hands-on investing experience, business knowledge, extensive research, and reliable sources. My goal through TheInvestorStory.com is to simplify investing, personal finance, business, and financial concepts so readers can make more informed financial decisions.
Disclaimer: The content provided is for educational and informational purposes only and should not be considered financial, investment, insurance, or legal advice.
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