Healthcare Sector Report
Market Cap: $7.9T
Stocks: 745
Median P/E: 8.7x
Median ROIC: -11.6%
Data sourced from SEC EDGAR filings. Report refreshed weekly.
The Healthcare sector comprises companies that provide medical services, manufacture medical equipment or pharmaceuticals, and develop biotechnology products. It includes managed care organizations, hospital systems, medical device makers, and drug developers. The sector benefits from non-cyclical demand patterns and demographic tailwinds, though faces regulatory and reimbursement headwinds.
Performance Dashboard
| Period | Sector (MCW) | Sector (Median) |
|---|---|---|
| 1 Day | -1.1% | 0.0% |
| 1 Week | -1.1% | 0.0% |
| 1 Month | — | — |
| 3 Months | — | — |
| 6 Months | — | — |
| YTD | -2.7% | +0.1% |
| 1 Year | +19.3% | +2.6% |
| 3 Years | +72.5% | -18.6% |
| 5 Years | +102.3% | -63.1% |
Today's Breadth: 317 advancing · 309 declining · 67 flat
Valuation Summary
| Metric | Median | P25 | P75 | vs 5Y Avg |
|---|---|---|---|---|
| P/E | 8.7x | 0.0x | 25.5x | -28% |
| P/B | 2.0x | 0.4x | 4.7x | -35% |
| P/S | 1.5x | 0.0x | 3.7x | — |
| P/FCF | 15.7x | 6.4x | 29.6x | — |
| EV/EBITDA | 13.7x | 8.1x | 21.6x | — |
| EV/EBIT | 17.9x | 11.7x | 27.5x | — |
Earnings Yield
4.2%
FCF Yield
-2.3%
Below Fair Value
45% of stocks
Profitability Profile
Margins
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| Gross Margin | 59.4% | 59.4% | 40.5% | 74.3% |
| Operating Margin | 3.9% | — | -16.8% | 15.3% |
| Net Margin | 0.2% | -2.9% | -18.0% | 10.2% |
| FCF Margin | 6.0% | — | -10.5% | 16.6% |
Returns on Capital
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| ROE | -16.5% | — | -57.8% | 9.2% |
| ROA | -11.3% | — | -37.3% | 3.7% |
| ROIC | -11.6% | -25.2% | -50.0% | 9.4% |
Growth Metrics
| Metric | 1Y | 3Y CAGR | 5Y CAGR |
|---|---|---|---|
| Revenue | +8.9% | +7.5% | +9.0% |
| EPS | +31.9% | +5.5% | +4.5% |
| Free Cash Flow | +12.5% | +5.9% | +4.3% |
All values represent sector median growth rates.
Balance Sheet Health
Debt / Equity
0.3x
Net Debt / EBITDA
0.8x
Interest Coverage
1.1x
Current Ratio
2.7x
Altman Z-Score
Safe (>3): 199 (34%)
Gray (1.8–3): 59 (10%)
Distress (<1.8): 321 (55%)
Piotroski F-Score
Strong (7–9): 100 (14%)
Moderate (4–6): 285 (39%)
Weak (0–3): 350 (48%)
Top Companies
| Symbol | #▲ | Mkt Cap | P/E | EV/EBITDA | ROIC | Net Mgn | Rev Gr. | Div Yld | YTD | Qual. |
|---|---|---|---|---|---|---|---|---|---|---|
| LLY | 1 | $836.0B | 46.9x | 34.8x | 41.6% | 31.7% | +44.7% | 0.6% | -4.8% | 6/9 |
| BMYMP | 2 | $815.5B | — | — | 15.1% | 14.6% | -0.2% | — | -18.7% | 3/9 |
| JNJ | 3 | $578.3B | 18.7x | 12.9x | 28.3% | 28.5% | +6.0% | 2.5% | -1.6% | 5/9 |
| ABBV | 4 | $369.7B | 96.7x | 20.3x | 15.6% | 6.9% | +8.6% | 2.9% | -5.2% | 4/9 |
| AZNCF | 5 | $314.2B | — | — | 16.8% | 17.4% | +8.6% | — | -0.3% | 4/9 |
| NVS | 6 | $301.7B | 18.9x | 14.4x | 43.1% | — | — | 3.0% | +0.8% | 5/9 |
| MRK | 7 | $301.3B | 14.7x | 12.0x | 23.9% | 28.1% | +1.3% | 3.1% | -0.0% | 6/9 |
| AMGN | 8 | $189.6B | 23.2x | 15.4x | 16.4% | 21.0% | +9.9% | 2.9% | -1.8% | 4/9 |
| ABT | 9 | $176.6B | 33.4x | 20.1x | 10.8% | 14.7% | +5.7% | 1.9% | +0.4% | 7/9 |
| GILD | 10 | $174.5B | 18.4x | 17.0x | 21.6% | 28.9% | +2.4% | 2.5% | -0.6% | 5/9 |
| ISRG | 11 | $166.6B | 73.4x | 57.4x | 20.2% | 28.4% | +20.5% | — | -0.4% | 4/9 |
| AZN | 12 | $158.2B | — | — | 16.8% | 17.4% | +8.6% | — | -0.6% | 5/9 |
| PFE | 13 | $156.2B | 18.1x | 11.6x | 7.3% | 12.4% | -1.6% | 7.0% | +2.2% | 3/9 |
| SYK | 14 | $134.2B | 42.1x | 23.1x | 10.6% | 12.9% | +11.2% | 0.9% | +3.5% | 4/9 |
| NVO | 15 | $127.9B | 11.4x | 8.0x | 38.9% | 33.1% | +11.5% | 4.5% | +0.7% | 6/9 |
| HCA | 16 | $119.1B | 16.8x | 11.2x | 20.3% | 9.0% | +7.1% | 0.6% | -4.3% | 5/9 |
| BMY | 17 | $118.4B | 15.6x | 9.6x | 15.1% | 14.6% | -0.2% | 4.6% | +1.3% | 5/9 |
| GSK | 18 | $118.0B | — | — | 23.9% | 19.3% | +7.4% | — | -1.6% | 3/9 |
| GLAXF | 19 | $117.1B | — | — | 23.9% | 19.3% | +7.4% | — | 0.0% | 3/9 |
| MDT | 20 | $113.6B | 22.8x | 14.6x | 7.2% | 13.9% | +3.6% | 3.4% | +1.2% | 3/9 |
Industry Composition
| Industry | Stocks | Market Cap | % | |
|---|---|---|---|---|
| Pharmaceutical Preparations | 328 | $5.5T | 69.4% | |
| Biological Products, (No Diagnostic Substances) | 102 | $615.3B | 7.8% | |
| Surgical & Medical Instruments & Apparatus | 100 | $568.2B | 7.2% | |
| Orthopedic, Prosthetic & Surgical Appliances & Supplies | 25 | $278.9B | 3.5% | |
| Services-General Medical & Surgical Hospitals, Nec | 5 | $150.5B | 1.9% | |
| Electromedical & Electrotherapeutic Apparatus | 31 | $139.7B | 1.8% | |
| Services-Medical Laboratories | 21 | $117.5B | 1.5% | |
| Drug Manufacturers - General | 1 | $87.9B | 1.1% | |
| Ophthalmic Goods | 6 | $60.9B | 0.8% | |
| In Vitro & In Vivo Diagnostic Substances | 15 | $59.6B | 0.8% | |
| X-Ray Apparatus & Tubes & Related Irradiation Apparatus | 4 | $52.3B | 0.7% | |
| Services-Misc Health & Allied Services, Nec | 12 | $52.2B | 0.7% | |
| Drug Manufacturers - Specialty & Generic | 3 | $46.9B | 0.6% | |
| Medical - Devices | 6 | $36.1B | 0.5% | |
| Services-Home Health Care Services | 7 | $25.7B | 0.3% |
Showing top 15 of 31 industries.
Quality Distribution
0
1
2
3
4
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6
7
8
9
Quality Score (0-9)
High Quality (7+)
2%
Median Piotroski F
4/9
Profitable Years
1 of 10
Dividends & Shareholder Returns
Paying Dividends
12%
Median Div Yield
1.8%
Median Buyback Yield
0.0%
Shareholder Yield
0.3%
Payout Ratio
35.6%
Div Growth (3Y)
4.4%
Div Growth (5Y)
5.1%
Strengths & Weaknesses
Strengths
- +[Profitability]High pricing power with a median gross margin of 59.4%, reflecting differentiated products or strong brand moats.
- +[Valuation]Attractive valuations: current median P/E of 8.7x is 28.4% below the 5-year average, presenting potential value opportunity.
Weaknesses
- −[Financial Health]55.4% of companies fall in the Altman Z-Score distress zone (<1.8), indicating elevated bankruptcy risk within the sector.
- −[Leverage]Tight interest coverage at 1.1x, leaving limited cushion for debt servicing if earnings decline.
- −[Profitability]Below-average capital returns with a median ROIC of -11.6%, suggesting limited pricing power or capital-intensive operations.
- −[Profitability]Razor-thin net margins at a median of 0.2%, leaving little room for execution error or economic downturn.