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It’s important to remember that stocks represent ownership interests in companies run by real management teams. How well a company is run has big implications to its profitability and stock performance.

One way to evaluate this is by looking at the corporate governance policies of the company, such as its board composition and shareholder rights. Institutional Shareholder Services (ISS) gives ratings for four areas of corporate governance, on risks related to: the board, the audit committee, the compensation committee, and shareholder rights.

We ran a screen on large-cap companies from the healthcare sector for those receiving “low concern” ratings in all four corporate governance categories rated by ISS.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Do you think these companies are being run well? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Johnson & Johnson (NYSE:JNJ): Engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Market cap of $175.77B. According to ISS, the company has "low concern" in all corporate governance categories. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.55%, current ratio at 2.51, and quick ratio at 2.2. The stock has gained 6.99% over the last year.

2. Pfizer Inc. (NYSE:PFE):
Offers prescription medicines for humans and animals worldwide. Market cap of $140.91B. According to ISS, the company has "low concern" in all corporate governance categories. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.43%, current ratio at 1.98, and quick ratio at 1.7. The stock has gained 8.93% over the last year.

3. Unitedhealth Group, Inc. (NYSE:UNH):
Provides healthcare services in the United States. Market cap of $53.75B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 7.98% over the last week.

4. Amgen Inc. (NASDAQ:AMGN):
Develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses primarily in the United States, Europe, and Canada. Market cap of $52.24B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 1.05% over the last year.

5. Medtronic, Inc. (NYSE:MDT):
Manufactures and sells device-based medical therapies worldwide. Market cap of $35.98B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 4.25% over the last year.

6. Stryker Corp. (NYSE:SYK):
Operates as a medical technology company worldwide. Market cap of $18.83B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 0.75% over the last year.

7. Zimmer Holdings, Inc. (NYSE:ZMH):
Engages in the design, development, manufacture, and marketing of orthopaedic reconstructive implants, spinal and trauma devices, dental implants, and related surgical products. Market cap of $10.76B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 5.17% over the last week.

*ISS rankings sourced from Yahoo! Finance, all other data sourced from Finviz.

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

Source: 7 Large-Cap Healthcare Stocks With Strong Corporate Governance