S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13

The Top 3 Healthcare Dividend Stocks to Buy and Hold

Thursday, August 19, 2021 | Sean Sechler
The Top 3 Healthcare Dividend Stocks to Buy and HoldThere are a number of reasons why buy and hold investing is so attractive. It’s a strategy that offers a simplified approach towards building wealth over time, given that investors just have to practice patience after adding shares of quality companies. There’s also the fact that since it’s a more passive approach to financial markets, you won’t need to spend tons of time actively managing your portfolio. Buy and hold investing also helps you avoid trying to time the market and can potentially save you thousands on capital gains taxes since the strategy tends to involve holding shares for a year or more.

The only issue with the buy-and-hold investing strategy is that it requires a keen eye for picking the right stocks. Otherwise, investors could be tying up a lot of their capital in shares that underperform over the long term. Healthcare is one area of the market that has plenty of strong companies to choose from, which means there are some good buy-and-hold stocks to consider. What’s even better is that many of these stocks offer dividends, allowing for even more gains over the long term.

That’s why we’ve put together the following list of the top 3 healthcare dividend stocks to buy and hold. Let’s take a deeper look below.

Eli Lilly and Company (NYSE: LLY)

If you are seeking a quality pharmaceutical company to add for the long-term, it’s hard to find many better options than Eli Lilly and Company. Investors can count on this major prescription drug producer to consistently generate billions in revenue each quarter thanks to the company’s leading drugs in a wide range of therapeutic areas, including endocrinology, cardiovascular, immunology, oncology, and neuroscience. It’s worth noting that more than half of this company’s revenue comes from its diabetes drug portfolio, which is important given that according to the CDC, over 1 in 10 Americans have diabetes.

There’s also a lot to like about Eli Lilly’s pipeline of new drugs that could lead to groundbreaking advances in healthcare going forward. Notably, the company has a cancer drug called Verzenio that is showing strong data in fighting early-stage breast cancer, along with an Alzheimer’s drug with massive potential. While this stock has already rallied considerably in 2021, buy-and-hold investors looking for one of the top names in the pharmaceutical industry should consider adding shares on dips. The stock currently offers a 1.25% dividend yield and has grown its payout at a 14.23% CAGR over the last 3 years.

UnitedHealth Group (NYSE: UNH)

Oftentimes, focusing on blue-chip names with a dominant market position in their respective industry is the best strategy for finding great buy-and-hold names. That’s a big reason why UnitedHealth Group should be on long-term investors’ shopping lists. It’s the largest managed health care firm in the United States and a company that provides essential health care products and services such as risk-based health insurance plans, pharmacy benefit management, and health care delivery and optimization. Health insurance has never been more important in the wake of the global pandemic, and investors should expect a powerhouse company like UnitedHealth Group to continue thriving for years to come.

This is a company with several different businesses that complement each other perfectly, and the fact that UnitedHealth Group continues to seek out new acquisitions to improve its integrated business is another strong selling point. Recently, the company announced plans to acquire Change Healthcare for $13 billion, a move that should improve the company’s Optuminsight health care technology and data analytics business. Finally, the company reported an impressive $71.3 billion in Q2 revenue, up 15% year-over-year, and could be in for a strong remainder of 2021 as the employment market continues to improve.

Cerner Corp (NASDAQ: CERN)

Companies like Cerner Corp that combine healthcare and technology certainly have a lot to offer, especially when you consider how many hospitals and care providers are still operating on older legacy systems. Cerner is a leading supplier of health care information technology solutions, health care devices, and remote hosting services and a member of the S&P 500, which certainly makes it an intriguing prospect for long-term investors. It’s also a company that receives a lot of big contracts from the U.S. Federal Government, which tells you how strong the company’s product offerings are.

While the stock only offers a 1.09% dividend yield, Cerner is still a top pick in the healthcare sector thanks to the potential for a rebound in its business as healthcare facilities start to increase their IT spending as the impacts of the pandemic diminish. The bottom line here is that Cerner has a leading market share in the electronic health record space and plenty of room for growth in areas outside of its core business, which is why it’s a great buy-and-hold candidate at this time.

Cerner is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

Should you invest $1,000 in Cerner right now?

Before you consider Cerner, 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 Cerner wasn't on the list.

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

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Cerner (CERN)2.5$71.67-0.3%1.23%41.67Hold$84.40
UnitedHealth Group (UNH)3.1$449.32+1.1%1.29%27.87Buy$489.38
Eli Lilly and (LLY)3.0$245.58-0.9%1.38%37.44Buy$272.71
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