5 Most Undervalued Healthcare Stocks To Buy According To Hedge Funds

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1. Johnson & Johnson (NYSE:JNJ)

TTM PE Ratio as of October 26: 11.25

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) is a New Jersey-based pharmaceutical and medical technologies company. In its third quarter, the company posted a non-GAAP EPS of $2.66, outperforming the estimates by 14 cents. Johnson & Johnson (NYSE:JNJ)’s revenue also beat the market expectations by around $300 million and was nearly up 7% YoY to $21.35 billion.

Johnson & Johnson (NYSE:JNJ) is a fairly safe stock for people looking for passive income as the company has been increasing its dividend for the past 62 years. Despite having a high dividend yield of 3.13% compared to the healthcare sector’s average yield of 1.58%, the company has a payout ratio of merely 44%. Johnson & Johnson (NYSE:JNJ) declared its latest quarterly dividend on October 19, payable by December 5 to the shareholders of record on November 21.

According to our database, Johnson & Johnson (NYSE:JNJ) was owned by 88 hedge funds in the second quarter of 2023 and the company takes the top spot on our list of most undervalued healthcare stocks according to hedgefunds.

ClearBridge Investments made the following comment about Johnson & Johnson (NYSE:JNJ) in its Q3 2023 investor letter:

“The health care space provided some opportunities in the quarter, as we increased our exposure to medical device company Becton, Dickinson as well as large cap pharmaceutical company Johnson & Johnson (NYSE:JNJ). Johnson & Johnson recently spun out its consumer health care business, becoming a more focused yet broadly diversified pharmaceutical and medtech company.”

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You can also look at the 13 Best Solar Energy Stocks To Invest In Heading Into 2024 and the Top Investors’ Stock Portfolio: 10 Small-Cap Stocks To Buy.

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