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We expect only modest GDP growth for the U.S. over the next several years; however, healthcare spending is likely to continue its incredible growth trajectory upward. One company that looks very attractive at current prices is Stryker (SYK). Stryker's share price has been weak as of late, presenting a buying opportunity for interested investors. We think Stryker is in the right place at the right time given its position in the ortho device market. Stryker revenues exceeded $7 billion for the first time in 2010 on the backs of aging boomers needing hip replacements. The company acquired the neurovascular business of Boston Scientific (BSX), smartly leveraging its patent portfolio to expand into this less mature market.

A commitment to its employees has earned Stryker a place among the 100 Best Places to Work. We think shares should fetch around $80 apiece in 2012 using a 10% discount rate to arrive at this estimate.

Another interesting healthcare opportunity can be found in Pfizer (PFE). Pfizer is a pharmaceutical giant, with a market cap of $158.3B and a dividend yield of 4.02%. Paulson maintained his number of shares in the firm last quarter, leaving it at 1.36% of his portfolio. PFE is trading at a P/E of 20, after coming off a 5-year low EPS of $1.02. However, average analyst estimates have EPS doubling that number in 2011, putting its forward P/E at only 8.7. As one of the leaders in the industry, Pfizer is a relatively stable and safe pharmaceutical company, and currently shows good short-term growth potential.

With a large stable of drugs in development, there is plenty of hope for long-term growth as well. Additionally, the firm just announced its intention to sell its Capsugel unit to KKR for $2.4B, and plans to use the proceeds on share repurchases. While the repurchases may not be enough to tip the scales for such a large company, they are a good sign of insider confidence in the stock. We think PFE could be a good deal for investors looking for a well-established pharmaceutical company at a good value.
Abbott Labs (ABT): Long deemed a “dividend champion” having not only paid but also increased its payouts for 39 straight years. The 3.8% current yield is well above average and the 65% payout ratio suggests future sustainability. In recent years the dividend growth rate has slowly been increasing, from an 8.8% average increase in the 10 year average to the 10.6% average increase in the 3 year average.

It might not be poised for huge growth, but ABT does allow for a strong combination of a high current yield and steadily increasing payouts. If you believe the heath care sector has been left behind, it could be an opportune buy. ABT goes ex-dividend today. The company's portfolio of patent protected drugs, along with its excellent nutritional and diagnostic groups and its history of strategic acquisitions, have dug ABT a wide economic moat, which is one of the reasons we think Warren Buffett might buy this stock.

Medtronic (MDT) is another dominating business. This company produces medical equipment and holds market leading positions in heart devices, insulin pumps, and spinal products.

Known once for its leaning too much on its heart disease business, the company has moved into other therapeutic areas, a good move in our opinion. Shares have appreciated over the past five months since we first wrote about the company here and again where we declared it one of our 10 dividend "kings" here. Medtronic backs up ABT on the “dividend champion” list, having increased payouts for 33 straight years.

This medical device company comes in with a current yield of 2.2%. Not substantial, but there is promise for the future. With a 19% 5 year average dividend growth rate and a likely increase in July, the yield on cost looks to make quick moves. The 30% payout ratio works just fine and if health care revives, MDT could be a solid growth opportunity.

And finally, we have Astra-Zeneca PLC (AZN). The large pharmaceutical company, with a market cap of $65.09B, is currently trading at a P/E of 8.15. The company could benefit from radiation treatment in Japan through Ethyol, a prescription drug by MedImmune, which is owned by AZN. On the other hand, the company recently agreed to pay $68.5 million in a settlement with the government over alleged improper marketing of its drug Seroquel. We also think AZN is one of five high yield healthcare stocks that Buffett might buy.

This pharma giant is particularly immune to commodity inflation. Margins remained intact during high inflation quarters dating back to 1994. This $68 billion company trades at 47.64 and yields 5.22%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Slow U.S. GDP Growth Won't Stop These Healthcare Stocks