
Healthcare stocks may help deliver steady gains across business cycles. Typically, healthcare companies are viewed as recession-resistant, and enjoy a stable stream of cash flows. Further, these companies invest heavily in research and development, enabling them to treat a wide range of diseases, making healthcare players a key part of the global economy.
In the past two decades, healthcare giants such as Novo Nordisk (NVO) and Eli Lilly & Co. (LLY) have delivered substantial returns to shareholders. While Eli Lilly stock is up 1,751% over this time frame, Novo Nordisk stock has surged a staggering 7,565% since February 2004, after adjusting for dividends.