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Health Care / Pharma Stocks 12-26-14

Health Care / Pharma Stocks 12-26-14

A, CAH and DGX were added 10-03-14. EPS changes are from July for those three. Yield in the spreadsheet below is based on the Q4-14 dividend. Some companies have yet to announce their Q4 dividend. Spreadsheet header abbreviations: Div = dividend; EPS = earnings per share; LTM = last twelve months; YTD = year to date. The dividend to EPS ratio is a measure of dividend safety. At this point in time, companies that pay dividends once per year have had their payouts divided by four and encoded in this data as if they paid a quarterly dividend. RHHBY had a two for one stock split on 2-27-14 -- and that change is not reflected in the data below. AZN pays two unidentical dividends per year. I take the sum of those dividends and divide by four to get a run rate dividend per quarter. A spun-off of Keysight Technologies Inc. (NYSE:KEYS) on November 1st - and with a KEYS price of $30.70. I am using an adjusted 2014 beginning price for A. This event explains the fall in A's target in 2014. ABT has increased its Q1-15 dividend from $0.22 to $0.24/share.


    12-31-13 12-26 Div Current Div/ Div/ Percent Change
Company and ticker Price Price /Quarter Yield EPS14 EPS15 Price Pr+Div EPS14 Target Div 1yr Div 3yr

Agilent Technologies (NYSE:A) 40.62 41.38 0.094 0.97 13.1% 23.0% 1.87 2.86 -0.33 -31.58 5.93 na
AbbVie Inc. (NYSE:ABBV) 52.81 66.98 0.420 2.51 50.9% 39.1% 26.83 30.01 4.10 42.62 5.00 na
AmerisourceBergen Corporation (NYSE:ABC) 70.31 91.51 0.235 1.27 29.2% 26.1% 30.15 31.80 7.59 36.05 23.40 41.03
Abbott Laboratories (NYSE:ABT) 38.33 45.85 0.220 1.92 38.9% 38.9% 19.62 21.91 2.73 25.72 57.14 -1.45
Allergan Inc. (NYSE:AGN) 111.08 211.95 0.050 0.09 3.2% 2.3% 90.81 90.99 15.38 90.64 0.00 0.00
Amgen Inc. (NASDAQ:AMGN) 114.08 163.46 0.610 1.49 28.3% 26.2% 43.29 45.42 5.39 42.44 29.79 39.29
AstraZeneca PLC (NYSE:AZN) 59.37 70.91 0.700 3.95 63.2% 66.4% 19.44 22.97 -4.94 23.98 0.00 1.23
Baxter International Inc. (NYSE:BAX) 69.55 74.56 0.520 2.79 42.6% 44.2% 7.20 10.19 -4.87 12.37 6.12 18.41
Bayer AG (OTCPK:BAYRY) 142.00 140.41 0.526 1.50 31.0% 28.1% -1.12 0.36 -22.93 25.00 16.63 10.23
CR Bard Inc. (NYSE:BCR) 133.94 168.40 0.220 0.52 10.5% 9.5% 25.73 26.38 9.00 22.93 4.76 5.26
Becton, Dickinson and Company (NYSE:BDX) 110.49 139.34 0.545 1.56 34.9% 32.0% 26.11 27.59 0.32 34.26 10.10 7.04
Bristol-Myers Squibb Company (NYSE:BMY) 53.15 59.58 0.360 2.42 80.0% 80.0% 12.10 14.81 1.69 14.49 2.86 1.96
Cardinal Health, Inc. (NYSE:CAH) 66.81 81.84 0.343 1.68 35.7% 32.2% 22.50 24.55 6.67 8.90 13.20 19.84
Covidien PLC (COV) 68.10 103.21 0.320 1.40 34.7% 33.3% 51.56 53.67 7.79 43.46 12.50 26.97
Quest Diagnostics (NYSE:DGX) 53.54 67.78 0.330 1.95 32.4% 30.1% 26.60 29.06 0.49 4.82 10.00 76.67
GlaxoSmithKline PLC (NYSE:GSK) 53.39 43.15 0.750 5.93 84.8% 85.9% -19.18 -14.38 -21.56 -8.48 3.90 5.95
Johnson & Johnson (NYSE:JNJ) 91.59 105.06 0.700 2.67 47.0% 45.4% 14.71 17.76 2.05 23.04 6.06 7.60
Eli Lilly and Company (NYSE:LLY) 51.00 70.39 0.490 2.78 70.5% 61.1% 38.02 41.86 -1.07 30.77 0.00 0.00
McKesson Corporation (NYSE:MCK) 161.40 210.15 0.240 0.46 11.5% 8.9% 30.20 30.80 -0.48 29.90 0.00 6.67
Medtronic Inc. (NYSE:MDT) 57.39 73.61 0.305 1.66 31.9% 30.1% 28.26 30.39 0.00 42.06 8.93 8.50
Merck & Co. Inc. (NYSE:MRK) 50.05 57.78 0.440 3.05 50.4% 49.7% 15.44 18.96 0.29 20.67 0.00 1.59
Novo Nordisk A/S (NYSE:NVO) 36.95 43.67 0.207 1.90 48.8% 42.6% 18.19 20.43 24.09 16.29 30.34 42.76
Novartis AG (NYSE:NVS) 80.38 94.10 0.680 2.89 51.9% 46.3% 17.07 20.45 -4.38 27.57 7.51 5.20
Pfizer Inc. (NYSE:PFE) 30.63 31.65 0.260 3.29 46.2% 46.8% 3.33 6.73 -0.88 13.22 8.33 10.00
Perrigo Company PLC (NYSE:PRGO) 153.46 165.96 0.105 0.25 6.8% 5.7% 8.15 8.42 -6.34 15.68 16.67 10.42
Roche Holding AG (OTCQX:RHHBY) 70.20 68.44 0.549 3.21 56.3% 51.3% -2.51 0.62 -8.67 23.03 8.66 9.30
St. Jude Medical Inc. (NYSE:STJ) 61.95 66.47 0.270 1.62 27.1% 25.7% 7.30 9.04 0.00 18.79 8.00 9.52
Stryker Corporation (NYSE:SYK) 75.14 95.64 0.305 1.44 29.1% 26.5% 27.28 29.12 -1.66 22.27 13.11 20.66
Teva Pharmaceutical Industries (NYSE:TEVA) 40.08 57.18 0.353 2.47 27.9% 27.6% 42.66 46.19 10.46 42.66 8.28 20.40
Thermo Fisher Scientific, Inc (NYSE:TMO) 111.35 127.67 0.150 0.47 8.7% 7.8% 14.66 15.20 2.52 22.84 0.00 5.13
Zimmer Holdings, Inc. (ZMH) 93.19 114.17 0.220 0.77 14.5% 13.7% 22.51 23.46 -2.58 31.64 10.00 na
Zoetis Inc. (NYSE:ZTS) 32.69 44.20 0.072 0.66 18.8% 17.2% 35.21 36.10 -4.94 57.84 11.54 na

Average         1.92 36.3% 34.5% 22.00 24.18 0.47 25.81 9.43 14.65

With the 10 Treasury at 2.16% and the sector average yield [on Q4 Divs] at 1.92% - the spread is -24 basis points.
The cap weighted ETF XLV is up 24.69% year to date - with dividends its total return is 25.89%.
* The change in the dividend is for the last twelve months and not year to date.

Dates used to credit dividends:

A : 1-27-15 ABBV : 2-12-15 ABC : 11-30-14 ABT : 2-12-15 AGN: 12-10-14 AMGN: 12-04-14 AZN: 09-14-14 BAX : 01-01-14
BAYRY: yearly BCR: 02-05-15 BDX: 12-30-14 BMY: 02-01-15 CAH: 01-14-15 COV: 11-05-14 DGX: 01-27-15 GSK: 01-07-15
JNJ: 12-09-14 LLY : 03-09-15 MCK: 01-01-14 MDT: 01-15-15 MRK: 01-07-15 NVO: yearly NVS: 04-09-14 PFE: 03-02-15
PRGO: 12-15-14 RHHBY: yearly STJ: 01-29-15 SYK: 01-29-15 TEVA: 12-01-14 TMO : 01-14-15 ZMH: 01-29-15 ZTS : 03-02-15

Differences between my coverage universe and the XLV My coverage includes BAYRY, GSK, NVO, NVS and RHHBY - and those non-US companies are not in the XLV. The XLV includes significant weightings in non-dividend paying GILD, CELG and BIIB. It has minor weightings in REGN, VRTX, MYL, BSX, ISRG, EW, MNK, LH and WAT.


    12-31-13 12-26 Price   Earnings Per Share P/E Ratios Yahoo
Company and ticker Price Price Change   2013 2014 2015 2013 2014 2015 CAGR

Biogen Idec Inc. (NASDAQ:BIIB) 279.57 342.40 22.47   896 1353 1629 38.21 25.31 21.02 20.40
Boston Scientific Corporation (NYSE:BSX) 12.02 13.17 9.57   46 83 89 28.63 15.87 14.80 10.52
Celgene Corporation (NASDAQ:CELG) 84.49 113.35 34.16   298 368 487 38.04 30.80 23.28 25.60
Edwards Lifesciences (NYSE:EW) 65.76 129.90 97.54   313 339 403 41.50 38.32 32.23 13.88
Gilead Sciences Inc. (NASDAQ:GILD) 75.10 93.79 24.89   204 795 991 45.98 11.80 9.46 23.98
Intuitive Surgical, Inc. (NASDAQ:ISRG) 384.08 531.24 38.31   1673 1557 1810 31.75 34.12 29.35 3.60
Laboratory Corp. of America (NYSE:LH) 91.37 108.25 18.47   695 678 732 15.58 15.97 14.79 9.32
Mallinckrodt PLC (NYSE:MNK) 52.26 97.91 87.35   317 494 665 30.89 19.82 14.72 30.67
Mylan, Inc. (NASDAQ:MYL) 43.40 57.60 32.72   289 356 416 19.93 16.18 13.85 14.59
Regeneron Pharmaceuticals (NASDAQ:REGN) 275.24 413.48 50.23   381 997 1174 108.52 41.47 35.22 19.82
Vertex Pharmaceuticals (NASDAQ:VRTX) 74.30 118.41 59.37   -198 -304 -40 na na na 19.00
Waters Corporation (NYSE:WAT) 100.00 114.35 14.35   504 539 593 22.69 21.22 19.28 9.37

Average       40.79         38.34 24.62 20.73 16.73

The Predictive Power of subsector on Valuations: There is a huge difference in the type of products or services that this universe produces. Could that difference account for differences in performance and valuation?

The following stocks were in the Distribution sub-sector: ABC , CAH , MCK . Their YTD mean price gain = 27.62% and 3 of the 3 beat the sector mean yearly price gain [22%]. Their mean yield = 1.13% and they had an average price/earnings ratio = 23.18. Their mean LTM dividend growth = 12.20% and they had an average CAGR projection of 10.87.

The following stocks were in the Medical devices sub-sector: BAX , BCR , BDX , COV , MDT , STJ , SYK , ZMH . Their YTD mean price gain = 24.49% and 6 of the 8 beat the sector mean yearly price gain [22%]. Their mean yield = 1.47% and they had an average price/earnings ratio = 19.70. Their mean LTM dividend growth = 9.19% and they had an average CAGR projection of 8.05.

The following stocks were in the Pharmaceutical sub-sector: ABBV , AMGN , AZN , BAYRY , BMY , GSK , JNJ , LLY , MRK , NVO , NVS , PFE , RHHBY , TEVA , ZTS . Their YTD mean price gain = 17.57% and 5 of the 15 beat the sector mean yearly price gain [22%]. Their mean yield = 2.71% and they had an average price/earnings ratio = 19.87. Their mean LTM dividend growth = 9.26% and they had an average CAGR projection of 5.44.

The following stocks were in the Diagnostic sub-sector: A , DGX , TMO . Their YTD mean price gain = 14.37% and 1 of the 3 beat the sector mean yearly price gain [22%]. Their mean yield = 1.13% and they had an average price/earnings ratio = 16.22. Their mean LTM dividend growth = 5.31% and they had an average CAGR projection of 8.93.

Earnings Growth & P/E Ratios 12-26

Fiscal and calendar years are not in sync. A, ABC, BDX, CAH, COV, MCK, MDT and PRGO are already in fiscal 2015. Several stocks sell at valuations based on their drug pipelines - and short-term growth in EPS fails to capture a growth picture which is expected to come in 2016 and beyond. BMY is a good example.


  Earnings / Share Earn. Growth P/E Ratios 14 EPS Range
Co. 2009 2010 2011 2012 2013 2014 2015 12-13 13-14 14-15 2013 2014 2015 High Low Range

A 80 200 295 312 288 306 174 -7.69% 6.25% -43.14% 14.37 13.52 23.78 308 305 0.98%
ABBV 0 0 0 0 314 330 430 na 5.10% 30.30% 21.33 20.30 15.58 323 310 3.94%
ABC 167 219 251 276 314 397 444 13.77% 26.43% 11.84% 29.14 23.05 20.61 394 387 1.76%
ABT 0 0 0 174 201 226 226 15.52% 12.44% 0.00% 22.81 20.29 20.29 229 196 14.60%
AGN 222 10 307 414 477 630 856 15.22% 32.08% 35.87% 44.43 33.64 24.76 630 575 8.73%
AMGN 491 521 533 651 760 861 931 16.74% 13.29% 8.13% 21.51 18.98 17.56 890 825 7.55%
AZN 519 560 733 641 506 443 422 -21.06% -12.45% -4.74% 14.01 16.01 16.80 455 421 7.67%
BAX 380 398 431 453 467 488 471 3.09% 4.50% -3.48% 15.97 15.28 15.83 492 486 1.23%
BAYRY 0 0 0 688 745 679 749 8.28% -8.86% 10.31% 18.85 20.68 18.75 762 759 0.44%
BCR 509 560 640 657 578 836 923 -12.02% 44.64% 10.41% 29.13 20.14 18.24 840 830 1.20%
BDX 495 490 533 537 581 625 681 8.19% 7.57% 8.96% 23.98 22.29 20.46 629 620 1.44%
BMY 168 216 228 199 182 180 180 -8.54% -1.10% 0.00% 32.74 33.10 33.10 184 170 7.78%
CAH 348 222 267 321 373 384 426 16.20% 2.95% 10.94% 21.94 21.31 19.21 433 420 3.39%
COV 284 338 397 426 372 415 433 -12.68% 11.56% 4.34% 27.74 24.87 23.84 405 397 1.93%
DGX 377 398 285 392 400 407 438 2.04% 1.75% 7.62% 16.95 16.65 15.47 410 397 3.19%
GSK 353 99 325 353 373 302 298 5.67% -19.03% -1.32% 11.57 14.29 14.48 322 289 10.93%

  Earnings / Share Earn. Growth P/E Ratios 14 EPS Range
Co. 2009 2010 2011 2012 2013 2014 2015 12-13 13-14 14-15 2013 2014 2015 High Low Range

JNJ 463 476 500 510 552 596 617 8.24% 7.97% 3.52% 19.03 17.63 17.03 603 591 2.01%
LLY 442 474 441 339 415 278 321 22.42% -33.01% 15.47% 16.96 25.32 21.93 280 266 5.04%
MCK 407 462 486 638 633 835 1083 -0.78% 31.91% 29.70% 33.20 25.17 19.40 1104 1070 4.07%
MDT 292 322 337 346 375 382 405 8.38% 1.87% 6.02% 19.63 19.27 18.18 408 400 2.09%
MRK 325 342 377 382 349 349 354 -8.64% 0.00% 1.43% 16.56 16.56 16.32 352 340 3.44%
NVO 71 92 102 142 167 170 195 17.61% 1.80% 14.71% 26.15 25.69 22.39 189 168 12.35%
NVS 369 426 378 389 501 524 587 28.79% 4.59% 12.02% 18.78 17.96 16.03 522 502 3.82%
PFE 202 222 231 219 222 225 222 1.37% 1.35% -1.33% 14.26 14.07 14.26 230 218 5.33%
PRGO 167 293 401 499 561 620 736 12.42% 10.52% 18.71% 29.58 26.77 22.55 760 730 4.84%
RHHBY 0 274 279 325 384 390 428 18.15% 1.56% 9.74% 17.82 17.55 15.99 398 394 1.03%
STJ 234 301 328 239 376 398 420 57.32% 5.85% 5.53% 17.68 16.70 15.83 402 396 1.51%
SYK 295 333 372 407 423 475 520 3.93% 12.29% 9.47% 22.61 20.13 18.39 477 471 1.26%
TEVA 336 454 497 535 501 507 512 -6.36% 1.20% 0.99% 11.41 11.28 11.17 508 461 9.27%
TMO 221 271 416 494 542 691 772 9.72% 27.49% 11.72% 23.56 18.48 16.54 695 689 0.87%
ZMH 394 433 480 530 575 605 640 8.49% 5.22% 5.79% 19.86 18.87 17.84 629 600 4.79%
ZTS 0 0 0 108 142 154 169 31.48% 8.45% 9.74% 31.13 28.70 26.15 155 145 6.49%

BDC Average           8.23 6.75 7.48 22.02 20.45 19.02     4.73

Yield + CAGR Total Return Expectations
The Total Return projection is the yield + dividend CAGR. LT Debt/Mkt Cap is the long term debt to market cap ratio with the numbers gathered from Yahoo Finance's 'key statistics' page. EPS Accr is short the historical EPS accuracy. For this sector, my accuracy varies from a '2.2' for those companies where I have historical start of the fiscal year projections. Consensus Ratings are also gathered from Yahoo Finance. The Div/Earn is the annualized Q4-14 dividend to 2014 EPS projection ratio.

Company Q4-14 Consensus Total Bond Bond LT Debt/ EPS My Total Rtn Consensus Price Implied CAGR Div Price
    Yield CAGR Return Ratings Yield Mkt Cap Accr RRRs - RRR Ratings RRR-Yld P/E /Earn /Earn

Agilent Technologies A 0.97% 7.00% 7.97% BBB+ 3.904 19.27% 2.20 10.00 -2.03 1.8 9.03 1.82% 13.07 13.52
AbbVie Inc. ABBV 2.51% 6.00% 8.51% A 3.157 13.76% 2.20 9.50 -0.99 1.9 6.99 8.82% 50.91 20.30
AmerisourceBergen Corporation ABC 1.27% 11.50% 12.77% A- 3.300 9.91% 2.20 9.80 2.97 2.1 8.53 10.85% 29.22 23.05
Abbott Laboratories ABT 1.92% 9.00% 10.92% A+ 3.742 12.46% 2.20 9.50 1.42 2.3 7.58 8.81% 38.94 20.29
Allergan Inc. AGN 0.09% 4.00% 4.09%   3.172 3.36% 2.20 9.50 -5.41 1.7 9.41 20.83% 3.17 33.64
Amgen Inc. AMGN 1.49% 8.00% 9.49% A 3.387 26.32% 1.00 9.50 -0.01 2.4 8.01 7.64% 28.34 18.98
AstraZeneca PLC AZN 3.95% 2.00% 5.95% AA- 3.406 10.64% 3.00 8.50 -2.55 3.0 4.55 1.81% 63.21 16.01
Baxter International Inc. BAX 2.79% 6.50% 9.29% A 3.140 23.65% 1.50 9.50 -0.21 2.4 6.71 4.30% 42.62 15.28
Bayer AG BAYRY 1.50% 8.00% 9.50% A 3.375 14.81% 3.00 9.40 0.10 1.0 7.90 8.98% 30.99 20.68
CR Bard Inc. BCR 0.52% 9.20% 9.72%   3.867 11.18% 2.20 10.50 -0.78 2.9 9.98 12.28% 10.53 20.14
Becton, Dickinson and Company BDX 1.56% 7.40% 8.96%   2.588 14.65% 3.00 10.50 -1.54 2.6 8.94 14.21% 34.88 22.29
Bristol-Myers Squibb Company BMY 2.42% 3.00% 5.42% A+ 3.059 7.87% 1.00 9.00 -3.58 2.4 6.58 18.54% 80.00 33.10
Cardinal Health, Inc. CAH 1.68% 9.10% 10.78% A- 3.410 14.87% 2.20 9.30 1.48 1.9 7.62 9.01% 35.73 21.31
Covidien PLC COV 1.40% 8.50% 9.90%   3.180 11.10% 2.20 10.00 -0.10 2.5 8.60 12.03% 34.70 24.87
Quest Diagnostics DGX 1.95% 7.80% 9.75% BBB+ 3.661 41.78% 2.20 10.70 -0.95 3.0 8.75 9.32% 32.43 16.65
GlaxoSmithKline PLC GSK 5.93% 3.00% 8.93% A+ 3.040 26.61% 3.00 10.00 -1.07 2.6 4.07 2.51% 84.77 14.29
Johnson & Johnson JNJ 2.67% 6.50% 9.17% AAA 2.878 5.09% 1.00 8.30 0.87 2.3 5.63 2.63% 46.98 17.63
Eli Lilly and Company LLY 2.78% 0.10% 2.88% AA- 3.514 7.87% 1.00 8.50 -5.62 2.5 5.72 9.74% 70.50 25.32
McKesson Corporation MCK 0.46% 12.00% 12.46% A- 3.186 21.89% 3.00 10.50 1.96 1.8 10.04 16.80% 11.50 25.17
Medtronic Inc. MDT 1.66% 6.00% 7.66% AA- 3.064 18.96% 2.20 8.50 -0.84 1.9 6.84 4.74% 31.94 19.27
Merck & Co. Inc. MRK 3.05% 3.50% 6.55% AA 2.884 16.36% 1.00 8.50 -1.95 2.5 5.45 2.30% 50.43 16.56
Novo Nordisk A/S NVO 1.90% 9.50% 11.40%   0.000 40.59% 2.20 10.50 0.90 2.0 8.60 17.27% 48.82 25.69
Novartis AG NVS 2.89% 5.50% 8.39% AA- 0.000 8.48% 2.20 8.50 -0.11 2.2 5.61 3.56% 51.91 17.96
Pfizer Inc. PFE 3.29% 3.00% 6.29% AA 3.103 18.94% 1.00 8.50 -2.21 2.3 5.21 0.06% 46.22 14.07
Perrigo Company PLC PRGO 0.25% 12.00% 12.25%   3.985 15.00% 1.00 10.00 2.25 1.8 9.75 15.54% 6.77 26.77
Roche Holding AG RHHBY 3.21% 7.50% 10.71%   0.000 38.49% 2.20 9.50 1.21 1.3 6.29 6.34% 56.31 17.55
St. Jude Medical Inc. STJ 1.62% 8.90% 10.52% A 3.220 19.90% 2.50 9.50 1.02 2.2 7.88 5.58% 27.14 16.70
Stryker Corporation SYK 1.44% 8.80% 10.24% A+ 3.263 11.33% 1.00 9.50 0.74 2.0 8.06 8.67% 29.05 20.13
Teva Pharmaceutical Industries TEVA 2.47% 5.00% 7.47% BBB+ 3.375 21.93% 1.00 10.50 -3.03 2.2 8.03 4.30% 27.85 11.28
Thermo Fisher Scientific, Inc TMO 0.47% 12.00% 12.47% BBB 3.490 28.13% 1.00 11.00 1.47 1.4 10.53 11.68% 8.68 18.48
Zimmer Holdings, Inc. ZMH 0.77% 9.10% 9.87% A- 2.886 8.89% 1.00 9.50 0.37 2.0 8.73 7.53% 14.55 18.87
Zoetis Inc. ZTS 0.66% 11.00% 11.66% BBB- 0.000 16.30% 2.20 11.00 0.66 1.8 10.34 20.88% 18.83 28.70

Average   1.92% 7.20% 9.12%         9.61   2.15       20.45

The Correlation between TR - RRR and Analyst Ratings:

The following stocks had TR - RRR of less than 0: A , ABBV , AGN , AMGN , AZN , BAX , BCR , BDX , BMY , COV , DGX , GSK , LLY , MDT , MRK , NVS , PFE , TEVA . Their YTD mean price gain = 25.40% and 10 of the 18 beat the sector mean yearly price gain [22%]. Their mean yield = 2.32% and they had an average price/earnings ratio = 19.64. Their mean LTM dividend growth = 6.89% and they had an average CAGR projection of 5.31 and an average RRR assessment of 9.46. They had an average analyst rating projection of 2.38.

The following had TR - RRR of more than 0: ABC , ABT , BAYRY , CAH , JNJ , MCK , NVO , PRGO , RHHBY , STJ , SYK , TMO , ZMH , ZTS . Their YTD mean price gain = 17.63% and 6 of the 14 beat the sector mean yearly price gain. Their mean yield = 1.42% - and they sold at an average price/earnings ratio = 21.50. Their mean LTM dividend growth = 15.34% and they had an average CAGR projection of 9.64 and an average RRR assessment of 9.81. They had an average analyst rating projection of 1.85.

Disclosure: The author is long ABC, ABT, AMGN, BAX, NVO, STJ, SYK.

Additional disclosure: My portfolio of health care stocks failed to beat the EFT XLV in 2014. I HATE losing to the sector average. I will probably cut BAX from the team - and add CAH or MCK.