4 Healthcare Stocks to Buy as the Sector Stages a Comeback

Industry Overview - The healthcare sector has underperformed compared to the S&P 500, growing only 2.5% in 2024 versus the benchmark's 23.3% increase [1] - The sector's weighting in the S&P 500 has dropped to a 25-year low of approximately 10%, while total U.S. healthcare spending has surged from $1.4 trillion in 2000 to $4.9 trillion in 2023 [2] - Key growth areas include telehealth, surgery, data analytics, and biotechnology, contributing to a 6.4% growth in the Health Care Select Sector SPDR in 2025 [2] Recent Developments - The nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services caused a slump of over 10% in the sector, but his confirmation hearing indicated a potential balanced approach towards health policies [3] - An aging population and rising health issues like obesity and diabetes are driving demand for healthcare services, which are considered defensive investments [4] Long-term Outlook - The healthcare sector is expected to undergo significant changes with the integration of AI in medical research, making it attractive for investors seeking steady cash flow from pharmaceutical companies known for regular dividends [5] Stock Highlights - GeneDx Holdings Corp. (WGS): Expected earnings growth rate of 288% for the current year, with a Zacks Consensus Estimate improvement of 86.5% over the past 60 days; Zacks Rank 1 and VGM Score of B [7] - Tenet Healthcare Corporation (THC): Expected earnings growth rate of 13.6% for the next year, with a Zacks Consensus Estimate improvement of 11.1% over the past 60 days; Zacks Rank 2 and VGM Score of A [8] - Rigel Pharmaceuticals, Inc. (RIGL): Expected earnings growth rate of 115.7% for the current year, with a Zacks Consensus Estimate improvement of 29.4% over the past 60 days; Zacks Rank 1 and VGM Score of A [9] - The Ensign Group, Inc. (ENSG): Expected earnings growth rate of 12.7% for the current year, with a Zacks Consensus Estimate improvement of 2.1% over the past 60 days; Zacks Rank 2 and VGM Score of A [10]