S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
Critical asset just had biggest fall on record (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands
S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
Critical asset just had biggest fall on record (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands
S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
Critical asset just had biggest fall on record (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands
S&P 500   5,096.27
DOW   38,996.39
QQQ   439.00
Pure Storage, Hormel Foods rise; WW International, First Advantage fall, Thursday, 2/29/2024
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Thursday, 2/29/2024
Average long-term US mortgage rises to 6.94% after marking fourth-straight weekly increase
Critical asset just had biggest fall on record (Ad)
Best Buy reports lower 4Q sales and profits as shoppers remain cautious
Grads From This Midwestern School Are More Likely to Start a Billion Dollar Company Than Founders Who Went To Stanford, Harvard, or MIT: Study
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
It's Leap Day, and You're Probably Working — Here's How 'February 29' Affects Your Paycheck
From Hometown Hero to Franchise Partner — 3 Celebrities Collaborating With Their Hometown Brands

4 med tech stocks with improving prognosis for 2024

Image of med tech stocks on a computer with businessman in front of a screen

Key Points

  • Medtech stocks have put in mixed performance over the past two years, offset by dividend payments. 
  • Many in the group are trading at value levels, with growth back in the forecast and expected to remain solid over the next two years. 
  • Tailwinds are forming that could help lift this market to new highs in 2024 and 2025. 
  • 5 stocks we like better than Johnson & Johnson

Med tech stocks have been a mixed bag of results the last two years, with most moving within established trading ranges. The impact of COVID and its effect on procedure volumes were slow to dissipate, and the growth outlook was uncertain, leaving the market for their stock without a solid catalyst to drive it despite many trading at value levels and paying healthy dividends. 

Today, these healthcare stocks are forecast to produce steady growth for at least the next two years, supported by innovation, post-COVID normalization, global population growth, advancing economic development in emerging markets, and penetration of existing markets. 

Top-line growth is expected to drive margin improvement, and most of these businesses pay dividends. The ones that don't provide value in other ways. The takeaway is that tailwinds are in place to support this sector, and they are expected to blow for years.

Johnson & Johnson, a Dividend King of MedTech stocks 

Dividend King Johnson & Johnson NYSE: JNJ had a solid Q4 due largely to its MedTech unit. The company's revenue is down year-over-year (YOY) due to the Kenvue spinoff, but the core, ongoing business is up 6.5% YOY, led by a 13% increase in MedTech. MedTech sales are driven by wound closure devices, which gives evidence of strengthening procedure volume, and contact lenses, which are a growing and recurring revenue stream. 

Earnings strength is expected to persist in 2024, and Johnson & Johnson will return to reported top-line growth in 2025. Until then, this King yields about 3.0%, trading at 15X earnings with a payout ratio below 50%. The pace of distribution growth may slow, but distribution growth should continue. Analysts made no change to the consensus following the release; they rate the stock at "hold" and assume a 5% upside at the midpoint and 35% at the high end of their range. 

Johnson & Johnson chart

Abbott Laboratories on track to break out of its trading range

Shares of Abbott Laboratories NYSE: ABT have been trapped in a trading range confirmed on the day of its Q4 earnings release. However, the market bought this dip and has the stock on track to break out of its range soon. This company demonstrates solid core growth and has returned to reported growth following the post-COVID letdown. Growth should accelerate throughout the year and into the next. 

The med tech unit supports Abbott’s strength, up 18% YOY on a 26% increase in the FreeStyle Libre glucose monitoring system. The diagnostic unit was also strong, producing double-digit core growth ex-COVID. This Dividend King pays a smaller 2% yield trading at a higher 25x valuation than JNJ but is equally safe and expected to grow. Abbott's value is tied to its business and management quality, which is among the highest of any healthcare-related business. 

ABT chart

Intuitive Surgical: Leading the MedTech group to new highs

Intuitive Surgical NASDAQ: ISRG is the group leader, producing 16% top-line growth and a wider margin in Q4. This company is growing its business and earnings leverage with accelerated device installations and growing procedure volume at existing locations. This is driving a 22% increase in instruments and accessories, the recurring portion of the business, setting it up to pay solid dividends in the future. Until then, the company has been focused on growing business and building shareholder value, which increased by 20% on an equity basis during 2023. Top- and bottom-line growth will remain strong in the double-digit range in 2024. 

Intuitive Surgical chart

Stryker Corporation trends higher on results and revenue quality

Stryker Corporation NYSE: SYK stands out among med techs, with its stock price trending steadily higher over the last decade. This stock trades at the highest valuation on this list, but there is a reason. Stryker is sustaining solid growth and pays dividends with the healthiest increase outlook. 

Stryker stock yields only 1% trading at 30x but pays out only 30% of its earnings outlook while consistently outperforming expectations. The distribution growth rate is attractive and more than doubles its peers JNJ and ABT. Analysts also help support the market, rating the stock a "buy" and leading the price action with upward revisions. The consensus assumes the stock is fairly valued near $315, but the most recent revision is to $345, or about 10% upside. 

Stryker Corporation chart

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in Johnson & Johnson right now?

Before you consider Johnson & Johnson, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Johnson & Johnson wasn't on the list.

While Johnson & Johnson currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

7 Energy Stocks to Buy and Hold Forever Cover

Do you expect the global demand for energy to shrink?! If not, it's time to take a look at how energy stocks can play a part in your portfolio.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Stryker (SYK)
4.9374 of 5 stars
$349.07-0.8%0.92%42.31Moderate Buy$331.52
Intuitive Surgical (ISRG)
4.6172 of 5 stars
$385.60-0.3%N/A76.66Moderate Buy$371.60
Abbott Laboratories (ABT)
4.9033 of 5 stars
$118.56-1.2%1.86%36.37Moderate Buy$120.00
Johnson & Johnson (JNJ)
4.8963 of 5 stars
$161.37-0.1%2.95%11.69Hold$177.31
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


Featured Articles and Offers

Johnson & Johnson's Stock Price at Critical Turning Point

Johnson & Johnson's Stock Price at Critical Turning Point

Johnson & Johnson had a solid quarter in Q4 despite the impacts of the Kenvue spin-off and the deleveraging of COVID-19 sales.

Search Headlines: