With the markets setting all-time highs again and the first quarter soon to begin winding down, investors may be pondering how to position themselves for the rest of the year. One sector that has received a lot in the past year, due to the pandemic and the change in administration in Washington, is health care.
Here are five notable health care laggards that appear to have plenty of upside potential, based on the consensus price targets from analysts, and may be worth a closer look. Most of them are dividend payers too.
Anthem Inc.’s (NYSE: ANTM) shares are trading more than 9% lower than at the start of the year, though they are down less than 3% from a year ago. This health insurance giant got a nice boost from the election, and Jefferies upgraded the shares to Buy last month. At about $290 a share, the stock trades fractionally lower than a week ago. The $366.95 consensus price objective implies more than 26% upside potential from the latest close. The 52-week trading range is $171.03 to $340.98, and the dividend yield is about 1.5%.
Vertex Pharmaceutical Inc. (NASDAQ: VRTX) is down around 11% year to date, and it is down almost 14% year over year. The Boston-based biotech posted mixed quarterly results earlier this month. Stifel and Daiwa Securities were bullish on the stock for this year. The $283.50 consensus price target suggests 32% or so upside from the latest close. The stock was last seen trading near $210, in a 52-week range of $197.47 to $306.08. Note that Vertex pays no dividend.
Merck & Co. Inc. (NYSE: MRK) shares have retreated more than 9% since the beginning of the year, and they are down 10% or so from a year ago. This stock is one of this year’s Dogs of the Dow, after being one of the worst-performing Dow stocks last year. The shares have around 28% upside, if the analysts’ mean price target of $96.14 proves to be accurate. They have traded mostly between $74 and $75 in the past week, and they have changed hands as high as $87.80 in the past year. The dividend yield here is about 3.5%.
Humana Inc. (NYSE: HUM) stock traded more than 9% higher at the beginning of the year than it does now. Year over year, though, shares are down less than 2%. The most recently reported quarterly results topped low expectations. RBC Capital Markets upgraded the shares recently. The $477.64 consensus analyst target is just above the 52-week high of $474.70, and it suggests there may be more than 25% upside. On Tuesday, shares dropped below $375 apiece for the first time this year. Humana pays about a 0.7% dividend.
UnitedHealth Group Inc. (NYSE: UNH) stock has pulled back almost 8% since the start of the year, though it is over 8% higher than a year ago. This health care plan provider also saw a boost from the election, and it recently announced a big acquisition. The consensus price target is $396.13, implying upside of more than 20%. Shares have retreated about 2% in the past week to near $325. The 52-week trading range is $187.72 to $367.95, and the dividend yield is near 1.5%.
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