1 Healthcare Stock with Solid Fundamentals and 2 We Brush Off
Petr Huřťák
Fri, July 10, 2026 at 5:05 PM GMT+5:30
3 min read
Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. Shareholders who bet on the industry have been rewarded lately as healthcare stocks have returned 11.5% over the past six months, topping the S&P 500 by 4.3 percentage points
Nevertheless, investors should tread carefully as the sector is heavily regulated, and businesses can be negatively impacted if the rules change. With that said, here is one healthcare stock poised to generate sustainable market-beating returns and two we’re steering clear of
Two Healthcare Stocks to Sell:
Biogen (BIIB)
Founded in 1978 and pioneering treatments for some of medicine’s most complex challenges, Biogen (NASDAQ:BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer’s disease, spinal muscular atrophy, and rare diseases
Why Does BIIB Give Us Pause?
Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.6% annually over the last five years
Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Biogen is trading at $198.91 per share, or 14.8x forward P/E. To fully understand why you should be careful with BIIB, check out our full research report (it’s free)
UFP Technologies (UFPT)
Market Cap: $1.85 billion
With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ:UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications
Why Is UFPT Not Exciting?
Modest revenue base of $608.9 million gives it less fixed cost leverage and fewer distribution channels than larger companies
Adjusted operating margin was unchanged over the last two years, suggesting it failed to gain leverage on its fixed costs
At $250.16 per share, UFP Technologies trades at 24x forward P/E. Dive into our free research report to see why there are better opportunities than UFPT
One Healthcare Stock to Watch:
Pfizer (PFE)
Market Cap: $149.2 billion
With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE:PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions
