The Motley Foolยท2025-08-12 09:52Core Viewpoint - The healthcare sector is currently undervalued, presenting opportunities for investors to acquire quality stocks at discounted prices [1][2]. Group 1: Zoetis - Zoetis operates in the animal health industry, providing a wide range of drugs and healthcare products for companion animals and livestock, with a portfolio of approximately 300 product lines [3][4]. - The animal health market is projected to grow from $48 billion in 2023 to between $75 billion and $85 billion by 2033, with Zoetis historically outpacing industry growth [4]. - Zoetis has a P/E ratio of 25, its lowest ever, and is expected to grow earnings by 9% to 10% annually over the next three to five years, making it an attractive long-term investment [5]. Group 2: Johnson & Johnson - Johnson & Johnson is a major player in pharmaceuticals and medical devices, having spun off its consumer products segment to focus on faster-growing areas [6][7]. - The company has a strong dividend history, having paid and raised its dividend for 63 consecutive years, with a current yield of 3% [7][8]. - The stock trades at a P/E ratio of 18, with expected annualized earnings growth of just over 7% in the coming years [8]. Group 3: Zimmer Biomet - Zimmer Biomet specializes in products for joint replacement, dental implants, and surgical robotics, addressing the needs of an aging population [9][10]. - The company has a low dividend payout ratio, currently at 12% of estimated 2025 earnings, indicating potential for significant dividend growth [11]. - Zimmer Biomet trades at 11 times 2025 earnings estimates, with expected earnings growth of 5% to 6% annually over the next three to five years [12].