Healthcare Stocks on the Rebound: Pfizer, Bristol Myers Squibb, and UnitedHealth Group

The US healthcare industry has faced significant challenges in recent years, including patent cliffs and rising medical costs. However, despite this, it remains one of the largest and most critical industries in the country.

Total healthcare spending per capita is nearly $15,000, the highest among developed countries. This presents an opportunity for investors to purchase dividend-paying stocks at bargain prices.

Three such companies are Pfizer (PFE), Bristol Myers Squibb (BMY), and UnitedHealth Group (UNH).

Pfizer has become a value stock after vaccine sales dried up, leading to a decline in top and bottom lines. The company now trades at just over 9 times this year's earnings estimates and yields 6%. Its dividend seems sustainable, as management continues to affirm its commitment to maintaining the payout.

Bristol Myers Squibb is facing a patent cliff with Eliquis and Opdivo losing US exclusivity in 2028. However, the company has a robust portfolio of fast-growing drugs and promising developmental candidates that could offset this decline. The stock trades at only 9 times this year's earnings estimates and yields 4%.

UnitedHealth Group is a central cog in US healthcare but has faced challenges due to surging Medicare costs and lawsuits. Despite this, the company's shares still trade at only 19 times 2026 earnings estimates and yield 2.5%. Analysts expect UnitedHealth's earnings to increase by more than 13% annually during the next three to five years.