Personal health and wellness is one of the many secular tailwinds for healthcare companies. Players catalyzing medical advancements have benefited from elevated demand, and their momentum is only rising as the industry has posted a 24.6% gain over the past six months, beating the S&P 500 by 11.4 percentage points.
Nevertheless, investors should tread carefully as the sector is heavily regulated, and businesses can be negatively impacted if the rules change. Taking that into account, here is one resilient healthcare stock at the top of our wish list and two we’re passing on.
Two Healthcare Stocks to Sell:
Brookdale (BKD)
Market Cap: $2.92 billion
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE: BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Why Are We Cautious About BKD?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Forecasted revenue decline of 3.7% for the upcoming 12 months implies demand will fall off a cliff
Brookdale is trading at $12.24 per share, or 15.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why BKD doesn’t pass our bar.
Supernus Pharmaceuticals (SUPN)
Market Cap: $2.81 billion
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Are We Bearish on SUPN?
- Annual revenue growth of 6.5% over the last five years was below our standards for the healthcare sector
- Modest revenue base of $822.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Free cash flow margin dropped by 16.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $48.25 per share, Supernus Pharmaceuticals trades at 3x forward price-to-sales. If you’re considering SUPN for your portfolio, see our FREE research report to learn more.
One Healthcare Stock to Buy:
HCA Healthcare (HCA)
Market Cap: $87.68 billion
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
What Makes HCA Stand Out?
- Unparalleled scale of $78.01 billion in revenue gives it negotiating leverage and staying power in an industry with high barriers to entry
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15.4% exceeded its revenue gains over the last five years
- ROIC punches in at 28.7%, illustrating management’s expertise in identifying profitable investments
HCA Healthcare’s stock price of $404.53 implies a valuation ratio of 13.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
