Top Healthcare Stock Predictions for the Rest of 2024: A Focus on Dividends and Growth

By Brad Broker

As 2024 progresses, investors are increasingly looking toward the healthcare sector for solid investment opportunities. Bolstered by sustained demand, technological advancements, and an aging population, healthcare stocks are expected to perform well in the latter half of the year. Here, we delve into three top healthcare stock predictions that stand out for their corporate earnings potential and dividend aristocrat status: Johnson & Johnson (JNJ), UnitedHealth Group (UNH), and AbbVie Inc. (ABBV).

1. Johnson & Johnson (JNJ)
Johnson & Johnson has long been a cornerstone of the healthcare sector, and it maintains its reputation as a dividend aristocrat, having raised its dividend for over 60 consecutive years. The company’s diverse operations across pharmaceuticals, medical devices, and consumer health products prove advantageous in times of economic uncertainty.

For the second quarter of 2024, JNJ reported an impressive earnings per share (EPS) of $2.58, exceeding analysts’ expectations. This strength is attributed to robust performance in its immunology and oncology segments, which saw a 9% increase in year-over-year sales. “With a strong pipeline that includes promising treatments in areas like Alzheimer’s and multiple myeloma, we expect JNJ to continue delivering solid earnings growth,” asserts Matt O’Connor, a healthcare analyst at Markit. Currently, JNJ offers a dividend yield of around 2.9%, which appeals to income-focused investors looking for stability.

2. UnitedHealth Group (UNH)
UnitedHealth Group represents a strong player in the health insurance market, and it, too, has achieved dividend aristocrat status, marking more than a decade of dividend growth. The company’s diversified business model encompasses health benefits and services, allowing it to mitigate risks while maximizing opportunities.

In its most recent earnings report, UnitedHealth posted an EPS of $6.14, surpassing projections by 15%. The company anticipates continued growth driven by advantages in its Optum services, which provide pharmacy care and healthcare analytics. Expert Sarah Thompson, a senior investment strategist at Wells Fargo, emphasizes, “The shift towards value-based care and integrated health platforms solidifies UNH’s competitive advantage.” Currently yielding about 1.6%, UnitedHealth’s dividend provides steady income in addition to its projected revenue growth of around 7% for the year, making it an excellent option for both growth and income investors.

3. AbbVie Inc. (ABBV)
AbbVie has also carved out a niche for itself within the healthcare sector and is noted for its impressive dividend policies, having raised its dividend each year since its inception in 2013. The company’s flagship product, Humira, continues to generate significant revenue, though AbbVie is diversifying its portfolio with the launch of newer drugs such as Rinvoq and Skyrizi.

For 2024, AbbVie reported an EPS of $3.87, reflecting a 10% year-over-year increase as demand for chronic condition treatments continues to rise. “AbbVie’s commitment to driving innovation and maintaining a strong pipeline positions it well for future growth,” notes Dr. Emily Carter, a biotech expert at JPMorgan. The company boasts a dividend yield of around 4.5%, attractive for income investors and a sign of confidence in its long-term profitability.

As we advance into the later months of 2024, stocks like Johnson & Johnson, UnitedHealth Group, and AbbVie stand out as strong contenders for investors seeking both dividend income and growth potential. Each has demonstrated solid corporate earnings and holds the status of dividend aristocrats, showcasing their resilience and commitment to shareholder returns. Investors are advised to conduct thorough research and tailor their investment strategies to align with these promising healthcare stocks, which are likely to navigate the complexities of the market successfully.