5 Best Healthcare Dividend Stocks to Buy

In this article, we will take a look at 5 best healthcare dividend stocks to buy. If you want to read our detailed analysis of the healthcare sector and dividend stocks, go directly to read 14 Best Healthcare Dividend Stocks to Buy.

5. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 75

Merck & Co., Inc. (NYSE:MRK) specializes in a wide range of biological therapies, medicines, and vaccines. In May, Barclays lifted its price target on the stock to $130 with an Overweight rating on the shares. The firm appreciated the company’s performance in its recent quarter.

On May 23, Merck & Co., Inc. (NYSE:MRK) declared a quarterly dividend of $0.73 per share, which fell in line with its previous dividend. It is one of the best dividend stocks on our list as it has raised its payouts for 12 years in a row. The stock’s dividend yield on May 23 came in at 2.58%.

As of the close of Q1 2023, 75 hedge funds in Insider Monkey’s database held stakes in Merck & Co., Inc. (NYSE:MRK), with a total value of over $3.7 billion.

Artisan Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter. Here is what the firm has to say:

“Merck & Co., Inc. (NYSE:MRK) is a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. Shares have benefited from investors seeking safety in areas with less economic and interest rate sensitivity. With about one third of its sales generated by blockbuster oncology drug Keytruda, the key issue for investors is the success of its large R&D pipeline to replace those sales when Keytruda comes off patent in 2028. However, Merck seems to be getting little credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions, besides return of capital to shareholders via dividends and share repurchases.”

4. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 75

AbbVie Inc. (NYSE:ABBV) is an American pharmaceutical company, based in Illinois. The company has been raising its dividends for the past 50 years and currently pays a quarterly dividend of $1.48 per share. With a dividend yield of 4.15%, as of May 23, ABBV is one of the best dividend stocks on our list.

Wells Fargo maintained an Overweight rating on AbbVie Inc. (NYSE:ABBV) in April with a $195 price target. The firm expects the company’s immunology drugs, Rinvoq and Skyrizi, to deliver double-digit growth this year.

AbbVie Inc. (NYSE:ABBV) was a part of 75 hedge fund portfolios at the end of Q1 2023, as per Insider Monkey’s database. The number grew from 73 in the previous quarter.

Baron Funds mentioned AbbVie Inc. (NYSE:ABBV) in its Q1 2023 investor letter. Here is what the firm has to say:

“In a difficult quarter during which the Health Care sector failed to participate in the broader market rally, Baron Health Care Fund modestly trailed the Benchmark by 42 basis points, as disappointing stock selection overshadowed favorable impacts from differences in sub-industry weights and cash exposure. Lower exposure to benchmark heavyweight AbbVie Inc. (NYSE:ABBV) and declines in Cytokinetics, Incorporated, Ascendis Pharma A/S, and Inhibrx, Inc. also weighed on performance in the sub-industry. We reduced our position in AbbVie Inc. due to our less optimistic view of the company’s pipeline and long-term growth profile.”

3. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 86

Johnson & Johnson (NYSE:JNJ) is next on our list of the best dividend stocks from the healthcare sector. In April this year, the company lifted its dividend for the 62nd consecutive year. It pays a quarterly dividend of $1.19 per share for a dividend yield of 3.04%, as of May 23.

The number of hedge funds tracked by Insider Monkey owning stakes in Johnson & Johnson (NYSE:JNJ) grew to 86 in Q1 2023, from 84 in the previous quarter. These stakes have a consolidated value of over $4.5 billion.

2. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 90

Danaher Corporation (NYSE:DHR) is a Washington-based diversified conglomerate that also manufactures and markets medical products. The company’s diagnostic business uses the most advanced tools and software. SVB Securities initiated its coverage on the stock in May with an Outperform rating and a $300 price target. The firm sees the company as one of the most prominent mega-cap companies in the life science tools universe.

On May 9, Danaher Corporation (NYSE:DHR) declared a quarterly dividend of $0.27 per share, which was consistent with its previous dividend. In 2023, the company stretched its dividend growth streak to nine years, which makes it one of the best dividend stocks on our list. The stock’s dividend yield came in at 0.47%, as of May 23.

At the end of Q1 2023, 90 hedge funds tracked by Insider Monkey reported having stakes in Danaher Corporation (NYSE:DHR), up from 88 in the preceding quarter. These stakes are collectively valued at over $5.6 billion.

Madison Investments mentioned Danaher Corporation (NYSE:DHR) in its Q1 2023 investor letter. Here is what the firm has to say:

“Danaher Corporation (NYSE:DHR) has been trading lower since it reported fourth quarter earnings in January. The company lowered Covid-19 related sales for 2023 from $500 million to $150 million as pharmaceutical companies are switching their focus away from pandemic vaccines and therapeutics to the research and development of new drugs. Danaher’s pharmaceutical customers will be working through existing inventory before starting to order new products. We remain confident in Danaher’s strong competitive position providing innovative products to Life Science companies. Healthcare insurance stocks have been weak due to a ruling by CMS (Center for Medicare & Medicaid Services) in late January where claw back payments totaling $4.7 billion were due from insurers that overcharged Medicare. The claw back payment period goes back to 2011.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 116

UnitedHealth Group Incorporated (NYSE:UNH) tops our list of the best dividend stocks in the healthcare sector. The company was a part of 116 elite funds in Q1 2023, up from 110 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of over $11.7 billion.

UnitedHealth Group Incorporated (NYSE:UNH) has raised its dividends every year since 2010. It currently pays a quarterly dividend of $1.65 per share and has a dividend yield of 1.38%, as of May 23.

Fred Alger Management mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2023 investor letter. Here is what the firm has to say:

“UnitedHealth Group Incorporated (NYSE:UNH) is an integrated healthcare benefits company uniquely positioned to address rising healthcare costs for its customers, due to its vertical integration, size, and scale. The Optum health benefits services unit, which accounts for approximately 45% of the company’s operating earnings, in our view, has the potential to grow even further as customers look for ways to manage rising healthcare costs. During the period, shares detracted from performance due to several factors: 1) many 2022 healthcare winners with shorter duration profiles and persistent earnings profiles, such as UnitedHealth Group. underperformed in the first quarter of 2023, 2) uncertainty surrounding Medicare Advantage reimbursement levels from the Federal government in 2023, which will be determined later in the year, and 3) increased regulatory scrutiny in the form of potential Medicare Advantage audits across the industry. While these concerns have impacted UnitedHealth in the near-term, we believe company fundamentals remain intact given its large scale business model, competitive advantages, and medium to long- term growth prospects.”

You can also take a look at 25 Most Prescribed Medication in the World and David Einhorn’s 2023 Portfolio: Top 15 Stock Picks

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