Sector Screened Stocks: Healthcare

 |  Includes: BDX, LNCR, MDT, STJ
by: Brad Kenagy

This article will be the fourth in a series where I look for stocks I think will do well this upcoming year (see basic materials, consumer goods). In this article I am focusing on healthcare stocks and to screen for them I will use the same criteria that I used in this article of mine (the first in this series) for finding stocks in the financial sector. Because there was only one stock that matched my criteria and I wanted at least two, I had to slightly modify my criteria. The difference between the criteria I used to search for financial stocks and consumer goods was that I eliminated the price to book criteria, and lowered the dividend yield from 3% to 2%.

For my search I used the free stock screener from FinViz.and used the following screener settings:

  1. I selected only stocks in the Conglomerates category.

  2. Companies with a market capitalization of $2 billion or greater.

  3. A PEG (Price/Earnings to Growth ratio) of less than 2.

  4. Positive Return on Assets.

  5. Positive Return on Equity.

  6. Positive EPS growth this year.

  7. Positive EPS growth quarter over quarter.

  8. Positive Sales growth this year.

  9. Positive Sales growth quarter over quarter.

  10. Long Term debt/Equity ratio of less than 1.

  11. Dividend Yield of greater than 2%.

Four companies met all of the above criteria, and they are listed below with a short business summary, PE ratio, and dividend yield from Yahoo Finance, and one year performance from FinViz:

  1. St. Jude Medical Inc. (NYSE:STJ)

  • St. Jude Medical, Inc. develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide. St. Jude Medical has a PE of 12.59 and a dividend yield of 2.40%.

  • 1 Year Performance: -13.04%

  1. Becton, Dickinson and Company (NYSE:BDX)

  • Becton, Dickinson and Company is a medical technology company that develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Becton, Dickinson and Company has a PE of 13.00 and a dividend yield of 2.50%.

  • 1 Year Performance: -10.38%

  1. Medtronic, Inc. (NYSE:MDT)
  • Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. Medtronic has a PE of 12.31 and a dividend yield of 2.50%.

  • 1 Year Performance: +9.73%

  1. Lincare Holdings Inc. (NASDAQ:LNCR)
  • Lincare Holdings Inc., together with its subsidiaries, provides home oxygen and other respiratory therapy services to home health care market in the United States. Lincare has a PE of 13.04 and a dividend yield of 3.30%.

  • 1 Year Performance: -5.46%


Out of the four companies that met all the criteria, three were in the industry of medical devices and/or equipment. Another observation I had was that there was no big pharmaceutical companies that met all the criteria, which I thought was odd.

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

Disclaimer: The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security.