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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 its ability to maintain a dividend yield.

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 the healthcare sector for stocks receiving “low risk” ratings in all four corporate governance categories from 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.

Click to enlarge

Do you think these companies are poised to outperform? Use this list as a starting 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 healthcare field worldwide. Market cap of $167.32B. 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 3.72%, current ratio at 2.46, and quick ratio at 2.17. The stock has gained 0.99% over the last year.

2. Pfizer Inc. (NYSE:PFE): A biopharmaceutical company, offers prescription medicines for humans and animals worldwide. Market cap of $141.82B. 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 4.34%, current ratio at 2.25, and quick ratio at 1.95. It has been a rough couple of days for the stock, losing 5.24% over the last week.

3. 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 $47.90B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 2.04% over the last year.

4. Unitedhealth Group, Inc. (NYSE:UNH): Provides healthcare services in the United States. Market cap of $46.55B. According to ISS, the company has "low concern" in all corporate governance categories. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 6.58. The stock is currently stuck in a downtrend, trading 5.1% below its SMA20, 6.52% below its SMA50, and 6.75% below its SMA200. The stock has performed poorly over the last month, losing 10.44%.

5. Medtronic, Inc. (NYSE:MDT): Manufactures and sells device-based medical therapies worldwide. Market cap of $35.57B. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 2.12% over the last year.

6. Stryker Corp. (NYSE:SYK): Operates as a medical technology company worldwide. Market cap of $17.42B. According to ISS, the company has "low concern" in all corporate governance categories. The stock is currently stuck in a downtrend, trading 5.6% below its SMA20, 5.75% below its SMA50, and 17.27% below its SMA200. The stock has lost 10.38% 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 $8.49B. According to ISS, the company has "low concern" in all corporate governance categories. The stock is currently stuck in a downtrend, trading 7.8% below its SMA20, 10.55% below its SMA50, and 20.05% below its SMA200. It has been a rough couple of days for the stock, losing 5.18% over the last week.

8. The Cooper Companies Inc. (NYSE:COO): Develops, manufactures and markets healthcare products serving the vision care and women's healthcare markets worldwide. Market cap of $2.74B. According to ISS, the company has "low concern" in all corporate governance categories. The stock is currently stuck in a downtrend, trading 10.69% below its SMA20, 19.08% below its SMA50, and 20.16% below its SMA200. The stock has performed poorly over the last month, losing 18.31%.

9. Health Management Associates Inc. (NYSE:HMA): Engages in the operation of general acute care hospitals and other healthcare facilities in non-urban communities in the United States. Market cap of $1.90B. According to ISS, the company has "low concern" in all corporate governance categories. This is a risky stock that is significantly more volatile than the overall market (beta = 2.21). Might be undervalued at current levels, with a PEG ratio at 0.85 and P/FCF ratio at 7.03. It has been a rough couple of days for the stock, losing 12.03% over the last week.

10. Tenet Healthcare Corp. (NYSE:THC): Operates acute care hospitals and related healthcare facilities. Market cap of $1.81B. According to ISS, the company has "low concern" in all corporate governance categories. This is a risky stock that is significantly more volatile than the overall market (beta = 2.26). The stock is currently stuck in a downtrend, trading 13.76% below its SMA20, 9.13% below its SMA50, and 28.69% below its SMA200. It has been a rough couple of days for the stock, losing 8.15% over the last week.

11. HEALTHSOUTH Corp. (NYSE:HLS): Offers inpatient rehabilitative healthcare services in the United States and Puerto Rico. Market cap of $1.52B. According to ISS, the company has "low concern" in all corporate governance categories. The stock is a short squeeze candidate, with a short float at 8.1% (equivalent to 5.35 days of average volume). The stock is currently stuck in a downtrend, trading 10.71% below its SMA20, 5.25% below its SMA50, and 28.51% below its SMA200. The stock has performed poorly over the last month, losing 10.45%.

12. Cambrex Corporation (NYSE:CBM): Provides products and services for the development and commercialization of new and generic therapeutics. Market cap of $183.13M. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 47.86% over the last year.

*ISS ratings 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: 12 Healthcare Stocks With Strong Corporate Governance