The 3 Best Healthcare Stocks to Buy for 2020

The 3 Best Healthcare Stocks to Buy for 2020

Posted On December 30, 2019 1:02 pm

You’ll hear plenty of predictions about what might be in store in 2020. Here’s one prediction that’s almost certain to come true: More money will be spent on healthcare. And where lots of money is spent, opportunities exist for investors.

Which stocks are most likely to be the biggest winners in the new year? I think three healthcare stocks appear to be especially poised to deliver nice gains for investors in 2020. They’re all profitable. They’re all growing. And they all have strong prospects for future growth. Here are my picks for the best healthcare stocks to buy for 2020, listed in alphabetical order.

1. Abbott Labs

It’s not easy for a healthcare giant to deliver double-digit percentage year-over-year earnings growth. But that’s exactly what Abbott Labs (NYSE:ABT) routinely does. I look for more of the same in 2020.

The biggest potential catalyst on the way for Abbott is the anticipated U.S. clearance for the new version of its popular Freestyle Libre continuous glucose monitoring (CGM) system. Robert Ford, Abbott’s current president and COO who will soon become CEO as Miles White steps down, said in the company’s third-quarter conference call that Abbott is “working through a handful of open items” with the U.S. Food and Drug Administration (FDA) but remains confident about approval for the new version.

I expect Abbott will indeed win the FDA clearance for the interoperable CGM version of Freestyle Libre in 2020, setting the stage for even more impressive sales growth. I also think that Abbott’s other newer products, including Alinity diagnostic systems and MitraClip mitral regurgitation devices, will fuel growth next year.

Investors will also like Abbott’s solid dividend. The company recently boosted its dividend payout for the 48th consecutive year. Its dividend now yields nearly 1.7%.

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