Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, limiting growth. This has capped returns as the industry’s six-month gain of 11.6% has lagged the S&P 500’s 16.3% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here is one healthcare stock poised to generate sustainable market-beating returns and two best left ignored.
Two Healthcare Stocks to Sell:
Gilead Sciences (GILD)
Market Cap: $155.3 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Wary of GILD?
- Sizable revenue base leads to growth challenges as its 3% annual revenue increases over the last two years fell short of other healthcare companies
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 6.9 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $125.95 per share, Gilead Sciences trades at 14.5x forward P/E. Read our free research report to see why you should think twice about including GILD in your portfolio.
Solventum (SOLV)
Market Cap: $13.05 billion
Founded in 1985, Solventum (NYSE: SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.
Why Are We Out on SOLV?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Estimated sales decline of 5.3% for the next 12 months implies a challenging demand environment
- Free cash flow margin shrank by 18 percentage points over the last four years, suggesting the company is consuming more capital to stay competitive
Solventum is trading at $73.20 per share, or 11.8x forward P/E. Dive into our free research report to see why there are better opportunities than SOLV.
One Healthcare Stock to Buy:
Cencora (COR)
Market Cap: $70.85 billion
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE: COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Will COR Beat the Market?
- Dominant market position is represented by its $321.3 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
- Share buybacks catapulted its annual earnings per share growth to 15.1%, which outperformed its revenue gains over the last five years
- ROIC punches in at 55%, illustrating management’s expertise in identifying profitable investments
Cencora’s stock price of $365.54 implies a valuation ratio of 20.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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