Best dividend large-cap healthcare stocks to invest in Q3 2024

The healthcare industry remains a crucial pillar of global health, with large-cap companies offering both stability and substantial dividend yields. These firms are instrumental in delivering essential healthcare services and products, providing investors with reliable income streams.

Cardinal Health is a key player in healthcare distribution, ensuring that hospitals and clinics have the supplies they need to operate effectively. The Cigna Group is a leader in health insurance, offering comprehensive plans that cater to a wide range of medical needs. Abbott Laboratories excels in diagnostics and medical devices, driving innovation in patient care and treatment options.

Looking to strengthen your portfolio with top dividend-paying healthcare stocks? Explore our in-depth analysis of the best dividend large-cap healthcare stocks to invest in Q3 2024, and uncover the potential for both steady income and growth.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • Cardinal Health (CAH)

    Cardinal Health is a leading healthcare services company that provides pharmaceuticals and medical products to healthcare providers. They operate in three primary segments: Pharmaceutical Distribution, Medical Products, and Specialty Care.

    Cardinal Health financial statements

    Analysts recommendation: 2.26

    Financial Health

    • Return on assets (ROA): 2.91%
    • Return on equity (ROE): N/A
    • Return on investment (ROI): 133.26%

    Profitability

    • Gross margin: 3.26%
    • Operating margin: 0.98%
    • Net profit margin: 0.56%

    Growth

    • EPS (past 5 years): -5.3%
    • EPS (current): 5.15
    • EPS estimate (next quarter): 1.76
    • EPS growth (this year): 3.94%
    • EPS growth (next year): 10.85%
    • EPS growth (next 5 years): 13%
    • EPS growth (quarter-over-quarter): 8390%
    • Sales growth (past 5 years): 9.33%
    • Sales growth (quarter-over-quarter): -4.54%

    💡 Why invest in Cardinal Health?

    Cardinal Health offers several potential advantages for investors seeking exposure to the healthcare industry:

    • Essential Role: As a distributor of pharmaceuticals and medical products, Cardinal Health plays a critical role in the healthcare supply chain.
    • Diversified Revenue Streams: The company's three segments provide a diversified revenue base, reducing reliance on any single market.
    • Scale and Efficiency: Cardinal Health's size and scale enable it to leverage its distribution network and negotiate favorable terms with suppliers.
    • Growth Potential: The healthcare industry continues to grow, driven by factors such as an aging population and increasing demand for medical services.

    🐌 Key considerations before investing in Cardinal Health

    However, before investing in Cardinal Health, it's crucial to consider these potential challenges:

    • Regulatory Environment: The healthcare industry is heavily regulated, with changes in government policies impacting reimbursement rates and market dynamics.
    • Competition: The pharmaceutical distribution and medical products markets are competitive, with both established players and new entrants vying for market share.
    • Supply Chain Disruptions: Issues with product availability, transportation, or manufacturing can impact operations and profitability.
    • Economic Conditions: Economic downturns can affect healthcare spending and demand for medical products.

    Final thoughts on Cardinal Health

    Cardinal Health's role as a healthcare distribution leader, diversified revenue streams, and scale offer potential advantages for investors. However, the regulatory environment, competition, supply chain risks, and economic factors necessitate careful consideration. Thorough research on Cardinal Health's market share, financial performance, and the overall healthcare industry trends is crucial before investing.

  • The Cigna Group (CI)

    The Cigna Group, incorporated in Delaware but headquartered in Bloomfield, Connecticut, is a multinational giant in the healthcare and insurance space. With a rich history dating back to 1982, they've established themselves as a leading provider of health insurance, dental plans, and other related products and services. The Cigna Group looks beyond simply offering insurance; they strive to be a partner in navigating the complexities of healthcare and achieving total well-being.

    The Cigna Group financial statements

    Analysts recommendation: 1.54

    Financial Health

    • Return on assets (ROA): 2.04%
    • Return on equity (ROE): 6.92%
    • Return on investment (ROI): 4.2%

    Profitability

    • Gross margin: N/A
    • Operating margin: 3.01%
    • Net profit margin: 1.32%

    Growth

    • EPS (past 5 years): 10.54%
    • EPS (current): 10.6
    • EPS estimate (next quarter): 7.83
    • EPS growth (this year): 13.6%
    • EPS growth (next year): 10.67%
    • EPS growth (next 5 years): 12.07%
    • EPS growth (quarter-over-quarter): -44.58%
    • Sales growth (past 5 years): 48.25%
    • Sales growth (quarter-over-quarter): 28.02%

    💡 Why invest in The Cigna Group?

    The Cigna Group's strong position in the healthcare industry offers several potential advantages for investors seeking exposure to this critical sector:

    • Essential service: Health insurance is a must-have, making Cigna's offerings crucial for individuals and businesses.
    • Diversified products: Cigna offers a wide range of health and dental plans, reducing reliance on any single market segment.
    • Innovation focus: Cigna invests in new technologies to improve healthcare access, affordability, and customer experience.
    • Global presence: Operating in over 65 countries allows Cigna to benefit from growth in emerging healthcare markets.

    🐌 Key considerations before investing in The Cigna Group

    However, before investing in The Cigna Group, it's crucial to consider the potential challenges they face:

    • Competitive landscape: The healthcare insurance industry is crowded, with Cigna needing a competitive edge in cost, coverage, and digital experience.
    • Regulatory environment: Changes in government policies or healthcare laws can significantly impact Cigna's products, pricing, and profitability.
    • Rising healthcare costs: Cigna must manage costs effectively while offering comprehensive coverage to customers.
    • Economic downturns: During economic downturns, businesses and individuals might cut back on healthcare spending, impacting Cigna's revenue growth.

    Final thoughts on The Cigna Group

    The Cigna Group's strong brand, experience, diversified products, and focus on innovation paint a promising picture for long-term investors seeking exposure to the essential healthcare sector. However, the competitive landscape, regulatory environment, rising healthcare costs, and economic sensitivity necessitate careful consideration. Thorough research on Cigna's innovation pipeline, their strategies for navigating these challenges, and a clear understanding of your risk tolerance are crucial before adding The Cigna Group to your portfolio. Remember, in today's world, navigating healthcare can be complex, and The Cigna Group strives to be a guiding force. Their story could be a healthy addition to your investment journey.

  • Abbott Laboratories (ABT)

    In the vibrant realm where test tubes dance with diagnostics and medicine hums a symphony of healing, Abbott Laboratories reigns supreme. This medical device and healthcare titan isn't just crafting pills and pacemakers; it's orchestrating a global symphony of innovation, tackling diverse health challenges and transforming lives one breakthrough at a time. But can this healthcare maestro translate its medical mastery into rewarding returns for your portfolio? Let's explore the hidden currents propelling Abbott's rise, alongside the potential side effects to consider before joining this medical odyssey.

    Abbott Laboratories financial statements

    Analysts recommendation: 1.72

    Financial Health

    • Return on assets (ROA): 7.85%
    • Return on equity (ROE): 14.87%
    • Return on investment (ROI): 10.92%

    Profitability

    • Gross margin: 50.98%
    • Operating margin: 16.38%
    • Net profit margin: 13.94%

    Growth

    • EPS (past 5 years): 19.65%
    • EPS (current): 3.29
    • EPS estimate (next quarter): 1.34
    • EPS growth (this year): 5.28%
    • EPS growth (next year): 10.4%
    • EPS growth (next 5 years): 8.15%
    • EPS growth (quarter-over-quarter): 14.65%
    • Sales growth (past 5 years): 6.1%
    • Sales growth (quarter-over-quarter): 4.85%

    💡 Why invest in Abbott Laboratories?

    Abbott's robust profile makes it a tempting pick for investors seeking exposure to the ever-evolving healthcare sector. Here's what fuels its formidable medical toolbox:

    • Healthcare Heavyweight: Abbott boasts a diversified portfolio spanning diagnostics, medical devices, nutrition, and pharmaceuticals. This leadership in multiple healthcare facets translates to consistent revenue streams and mitigates risk by not relying solely on one drug's success.
    • Innovation Alchemist: From futuristic continuous glucose monitors to next-generation heart valves, Abbott invests heavily in R&D, striving to stay ahead of the curve with solutions that redefine diagnoses, treatments, and patient monitoring. This commitment to innovation ensures its offerings remain relevant and future-proofs its operations.
    • Global Guardian: With operations spanning continents, Abbott caters to diverse healthcare needs worldwide and unlocks international growth potential. This global reach provides access to emerging markets with burgeoning healthcare demands, further bolstering its future prospects.
    • Dividend Dynamo: Abbott boasts a strong track record of consistent dividend payments, returning a portion of its profits to shareholders. This income stream coupled with potential capital appreciation provides a compelling reason for long-term investors.

    🐌 Key considerations before investing in Abbott Laboratories

    While Abbott navigates the healthcare labyrinth with its diversified portfolio and innovative solutions, there are some potential side effects to consider before joining this high-stakes journey:

    • Valuation Concerns: Like many established healthcare companies, ABT's stock can be volatile, and the current price might reflect expectations of future drug approvals, clinical trial outcomes, and overall market trends. A cautious approach with a patient, long-term perspective is wise.
    • Regulatory Headwinds: Evolving regulations surrounding drug approvals, healthcare reforms, and pricing policies can impact Abbott's profitability and market access. Close monitoring of regulatory developments and their impact on the sector is crucial.
    • Patent Precipices: Loss of exclusivity for key drugs due to patent expiry can impact revenue streams. Regularly assessing Abbott's pipeline and patent expirations is important for understanding future growth potential.
    • Healthcare Jitters: Macroeconomic factors like healthcare reforms and insurance coverage changes can impact patient access to treatment and indirectly affect Abbott's sales. Diversification in your portfolio mitigates this risk.

    Final thoughts on Abbott Laboratories

    Abbott's diversified portfolio, commitment to innovation, global reach, and consistent dividends paint a potentially promising picture for long-term investors seeking exposure to the dynamic healthcare sector. However, the volatile nature of the stock, regulatory headwinds, patent considerations, and healthcare uncertainties warrant a measured approach. Thorough research, analysis of Abbott's future plans and the healthcare landscape, and a clear understanding of your risk tolerance are crucial before joining this medical expedition. Remember, navigating the intricate terrain of healthcare stocks requires both a discerning eye for cutting-edge solutions and a balanced perspective on potential challenges. Choose wisely, and your portfolio might just find itself feeling healthy alongside the success story of Abbott Laboratories.

If you are interested in other stock categories, check out my other lists of the best dividend large-cap tech, retail, financial, healthcare, industrial, basic materials, energy, utility stocks.