Everybody needs healthcare or will at some point. As the population grows older and medical advancements expand, healthcare spending is rising rapidly. Over the next decade, healthcare costs are expected to grow much faster than the overall economy, eventually making up nearly a fifth of the nation’s GDP.
As the demand for medical treatments and services continues to rise, fundamentally sound healthcare stocks like AbbVie Inc. (ABBV), Gilead Sciences, Inc. (GILD), and Bristol-Myers Squibb Company (BMY) are poised for long-term growth. These companies tackle some of the biggest healthcare challenges by developing cutting-edge treatments and breakthrough therapies.
Some of the most pressing issues today include rare diseases, chronic conditions, and the need for more accessible and affordable healthcare. Around 300 million people worldwide are affected by rare diseases, yet treatments remain limited. Meanwhile, an aging population and lifestyle-related illnesses are increasing the demand for better medications and therapies.
The healthcare industry is rapidly evolving to meet these growing needs, fueled by technological advancements and a shift toward value-based care. As a result, the global healthcare market is expected to reach $44.76 trillion by 2032, growing at a CAGR of 9.1%.
Meanwhile, advancements like AI-powered diagnostics and wearable health tech are revolutionizing patient care. AI is improving early disease detection, enabling faster, more accurate diagnoses, and even predicting health risks before symptoms appear. The AI healthcare market alone is set to hit $164.16 billion by 2030, expanding at a CAGR of 49.1%.
Given these favorable market trends, let’s look at the fundamental aspects of the aforementioned stocks in detail:
AbbVie Inc. (ABBV)
ABBV is a global diversified research-based biopharmaceutical company engaged in manufacturing and selling medications and therapies. It offers a comprehensive product portfolio across Immunology, Oncology, Neuroscience, Eye Care, Aesthetics, and Other Specialties.
On February 14, the company paid its shareholders a quarterly dividend of $1.64 per share. This reflects an increase of approximately 5.8%, continuing ABBV’s strong commitment to returning cash to shareholders through a growing dividend.
It pays an annual dividend of $6.56, which translates to a yield of 3.23% at the current share price. Its four-year average dividend yield is 3.85%. Moreover, the company’s dividend payouts have increased at an impressive CAGR of 7.5% over the past five years.
On December 13, 2024, ABBV announced the acquisition of Nimble Therapeutics to strengthen its immunology pipeline further. The deal includes Nimble’s lead asset, an investigational oral peptide IL-23R inhibitor currently in preclinical development for psoriasis, as well as a pipeline of innovative oral peptide candidates targeting various autoimmune diseases with significant unmet needs.
Additionally, ABBV will gain access to Nimble’s proprietary peptide synthesis, screening, and optimization platform, designed to enable the discovery and optimization of oral peptide therapeutics.
During the fiscal fourth quarter (ended December 31, 2024), ABBV’s net revenue increased 5.6% year-over-year to $15.10 billion, while the company’s Neuroscience segment reported net revenue of $2.51 billion, indicating a 19.8% growth from the prior-year quarter. Its oncology and eye care segments also registered a year-over-year increase of 12% and 10.2%, respectively. ABBV’s adjusted net earnings for the quarter came in at $3.84 billion and $2.16 per share.
The consensus revenue estimate of $12.93 billion for the fiscal first quarter (ending March 2025) represents a 5.1% increase year-over-year. The consensus EPS estimate of $2.52 for the same period indicates a 9.2% improvement year-over-year. The company has an impressive surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.
Shares of ABBV have gained 30.5% over the past nine months and 15.4% year-to-date to close the last trading session at $205.02.
ABBV’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has a B grade for Growth, Value, Stability, Sentiment, and Quality. Out of 152 stocks in the Medical - Pharmaceuticals industry, ABBV is ranked #5. Click here to see ABBV’s rating for Momentum.
Gilead Sciences, Inc. (GILD)
GILD is a biopharmaceutical company dedicated to advancing treatments for life-threatening diseases such as human immunodeficiency virus (HIV), viral hepatitis, COVID-19, and cancer. Its portfolio of marketed products includes Biktarvy, Genvoya, Odefsey, Truvada, Harvoni, Vemlidy, and Veklury, among others.
On February 11, the company’s board of directors approved a 2.6% increase in its quarterly dividend, raising it to $0.79 per share, beginning in the first quarter of 2025. The dividend is payable on March 28, 2025, to shareholders of record as of March 14, 2025.
GILD’s annual dividend of $3.16 yields 2.86% at the current price level, while its four-year average yield is 4.01%. Its dividend payouts have increased at a 2.7% CAGR over the past three years and a 4.1% CAGR over the past five years. GILD has a record of nine years of consecutive dividend growth.
On January 11, GILD and LEO Pharma announced a strategic partnership to accelerate the development and commercialization of LEO Pharma’s small molecule oral STAT6 (signal transducer and activator of transcription 6) programs for the potential treatment of patients with inflammatory diseases.
The company will acquire LEO Pharma’s preclinical STAT6 inhibitors and targeted protein degraders, gaining global rights for development, manufacturing, and commercialization as part of the deal. This collaboration strengthens GILD’s inflammation research portfolio.
For the fiscal fourth quarter, which ended on December 31, 2024, GILD’s total revenues increased 6.4% year-over-year to $7.57 billion. Its operating income grew 52% from the prior year to $2.45 billion, while its non-GAAP net income stood at $2.39 billion, up 10.6% year-over-year. In addition, non-GAAP earnings per share attributable to the company rose 10.5% from the year-ago value to $1.90.
According to the full-year 2025 guidance, GILD forecasts product sales to range from $28.20 billion to $28.60 billion. It also expects non-GAAP EPS to be between $7.70 and $8.10.
Analysts expect GILD’s revenue for the first quarter (ending March 2025) to increase 1.2% from year-over-year to $6.76 billion, while its EPS is estimated to come in at $1.75 for the same period. Moreover, it topped the consensus EPS and revenue estimates in each of the trailing four quarters, which is impressive.
Over the past nine months, the stock has gained 70.5%, closing the last trading session at $111.99.
It’s no surprise that GILD has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Sentiment and a B for Growth, Value, and Quality. Of the 332 stocks in the Biotech industry, it is ranked #2.
Beyond what is stated above, we’ve also rated GILD for Momentum and Stability. Get all GILD ratings here.
Bristol-Myers Squibb Company (BMY)
BMY discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases.
On January 31, the company announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval of Opdivo (nivolumab) and Yervoy (ipilimumab) as a first-line treatment for adults with unresectable or advanced hepatocellular carcinoma (HCC).
Based on the Phase 3 CheckMate -9DW trial, this recommendation now awaits the European Commission’s review, which could expand treatment options for advanced liver cancer patients.
On January 3, BMY paid its shareholders a quarterly dividend of $0.62 per share, reflecting an increase of 3.3% over last year’s quarterly rate of 60 cents per share. This marks the 16th consecutive year the company has increased its dividend, and the 93rd consecutive year it has paid dividends.
BMY’s annual dividend of $2.48 translates to a 4.32% yield on its prevailing prices, while its four-year average dividend yield is 3.64%. Its dividend payouts have grown at CAGRs of 6.4% and 7.6% over the past three and five years, respectively.
BMY’s total revenues increased 7.5% year-over-year to $ 12.34 billion in the fourth quarter, which ended on December 31, 2024. Its non-GAAP gross profit grew 4.1% from the year-ago value to $9.13 billion, while its attributable net earnings amounted to $72 million or $0.40 per common share.
Street expects BMY’s EPS for the fiscal year (ending December 2025) to increase 486.6% year-over-year to $6.75, and its revenue for the same year is expected to be $45.65 billion. Further, the company surpassed the consensus revenue estimates in all of the trailing four quarters.
The stock has gained 42.6% over the past nine months to close the last trading session at $58.80.
BMY’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Buy in our proprietary rating system.
BMY has a B grade for Growth, Value, Stability, and Quality. It is ranked #7 among 152 stocks in the Medical - Pharmaceuticals industry. Click here to see BMY’s rating for Momentum and Sentiment.
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ABBV shares were unchanged in after-hours trading Thursday. Year-to-date, ABBV has gained 16.46%, versus a -0.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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