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Are you interested in the high growth prospects of the healthcare sector? For a closer look at some interesting stocks in healthcare, we ran a screen.

We began by screening the healthcare sector for stocks that have outperformed the market over the last quarter, with over 20% return

Then to analyze these companies' profitability, we ran DuPont analysis, which analyzes profitability by breaking up return on equity (net income/equity) into three components:

ROE

= (Net Profit/Equity)

= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)

= (Net Profit margin)*(Asset turnover)*(Leverage ratio)

Because increases in net margin and asset turnover are considered good things, DuPont focuses on companies with these positive characteristics: Increasing ROE along with,

  • Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
  • Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)

Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable.

Interactive Chart: Press Play to compare changes in market cap 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 stocks will continue to outperform? Use this list as a starting point for your own analysis.

List sorted by performance over the last quarter.

1. Anika Therapeutics Inc. (NASDAQ:ANIK): Develops, manufactures, and commercializes therapeutic products for tissue protection, healing, and repair. Market cap at $228.69M, most recent closing price at $14.47. Performance over the last quarter at 67.04%. MRQ net profit margin at 15.62% vs. 9.17% y/y. MRQ sales/assets at 0.139 vs. 0.114 y/y. MRQ assets/equity at 1.402 vs. 1.514 y/y.

2. Integramed America Inc. (NASDAQ:INMD): Manages outpatient centers offering products and services to patients and providers in the fertility and vein care segments of the health industry in the United States. Market cap at $154.91M, most recent closing price at $12.83. Performance over the last quarter at 41.20%. MRQ net profit margin at 2.61% vs. 1.39% y/y. MRQ sales/assets at 0.45 vs. 0.429 y/y. MRQ assets/equity at 1.759 vs. 1.78 y/y.

3. ZOLL Medical Corp. (NASDAQ:ZOLL): Develops, manufactures, and markets resuscitation devices and related software solutions worldwide. Market cap at $2.07B, most recent closing price at $93.0. Performance over the last quarter at 37.61%. MRQ net profit margin at 4.96% vs. 3.45% y/y. MRQ sales/assets at 0.281 vs. 0.257 y/y. MRQ assets/equity at 1.288 vs. 1.374 y/y.

4. Community Health Systems, Inc. (NYSE:CYH): Provides healthcare services through the operation of hospitals in the United States. Market cap at $2.23B, most recent closing price at $23.70. Performance over the last quarter at 27.89%. MRQ net profit margin at 1.99% vs. 1.83% y/y. MRQ sales/assets at 0.239 vs. 0.228 y/y. MRQ assets/equity at 6.363 vs. 6.368 y/y.

5. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. Market cap at $2.75B, most recent closing price at $42.95. Performance over the last quarter at 24.02%. MRQ net profit margin at 40.16% vs. 30.46% y/y. MRQ sales/assets at 0.317 vs. 0.228 y/y. MRQ assets/equity at 1.293 vs. 1.314 y/y.

6. Mine Safety Appliances Co. (NYSE:MSA): Develops, manufactures, and supplies health and safety products used by workers in the fire service, homeland security, construction, and other industries, as well as the military. Market cap at $1.55B, most recent closing price at $41.15. Performance over the last quarter at 21.12%. MRQ net profit margin at 8.15% vs. 4.8% y/y. MRQ sales/assets at 0.258 vs. 0.225 y/y. MRQ assets/equity at 2.472 vs. 2.641 y/y.

7. MEDTOX Scientific Inc. (NASDAQ:MTOX): Provides forensic and clinical laboratory services, and offers diagnostic devices. Market cap at $182.55M, most recent closing price at $20.15. Performance over the last quarter at 20.97%. MRQ net profit margin at 5.25% vs. 3.11% y/y. MRQ sales/assets at 0.362 vs. 0.332 y/y. MRQ assets/equity at 1.334 vs. 1.411 y/y.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 7 Outperforming Healthcare Stocks With Strong Sources Of Profitability