Top 10 US Healthcare Stocks for Malaysian Investors 2024

For Malaysian investors looking to diversify their investment portfolios, US healthcare stocks offer an enticing option. The U.S., being one of the world’s largest medical markets, has a healthcare industry that is not only large in scale but also technologically advanced, with many world-class pharmaceutical companies, biotechnology firms, and medical service providers. US healthcare stocks are considered among the best healthcare stocks for investors looking for top investment opportunities.

Despite facing economic uncertainty, policy changes, and fluctuating market demands in recent years, the US healthcare sector has shown strong signs of recovery and has become a haven for many investors. For Malaysian investors seeking stable growth and long-term returns, understanding and selecting the appropriate US healthcare stocks are undoubtedly a crucial step in building a diversified investment portfolio.

What Are US Healthcare Stocks?

Healthcare service companies in the United States play a crucial role in the healthcare sector, providing a broad range of medical services and related products. These organizations may focus on specific areas of healthcare or offer comprehensive services, including but not limited to health insurance, pharmacy benefit management, health information technology services, health management, and care services. These companies typically collaborate with medical providers, pharmaceutical companies, government agencies, and other relevant entities to deliver efficient, high-quality healthcare services.

Why Malaysian Investors Should Consider US Healthcare Stocks

Growth Potential

The United States is one of the world’s largest economies, with a vast and mature health services market. Statistical data indicates that the scale of the U.S. healthcare industry is enormous, and the demand for health services in the healthcare sector is continuously rising due to an aging population and the increase in chronic diseases. This market size and growth potential are very attractive to investors seeking stable returns and future development.

Advanced Technology and Innovation Capability in the Healthcare Sector

The United States is at the forefront in the field of medical technology, with world-class medical institutions and research capabilities, continuously driving innovation and development in the health services industry. For example, U.S. insurance companies such as UnitedHealth and Humana are actively expanding their businesses in areas such as home health care and hospice care. Such innovative trends may attract Malaysian investors who wish to leverage the latest medical technologies and service models.

Stability of Policies and Regulations

The United States has a relatively stable and transparent commercial legal environment, providing foreign investors with more predictable investment conditions. Although U.S. healthcare policies may adjust with changes in government, overall, the U.S. government's support and regulation of the healthcare industry provide a certain degree of protection for investors.

Diversified Investment Opportunities

The healthcare sector covers a wide range of sub-sectors, including but not limited to hospital management, medical device manufacturing, drug development, health consulting, medical insurance, etc. This diversity allows investors to choose different investment targets based on their investment strategies and risk preferences, achieving diversified asset allocation and thereby reducing overall investment risk.

Stable Cash Flow

Health services companies, especially those focusing on basic medical services and drug production, can usually maintain a relatively stable level of income. This is because people's basic needs for health will not decrease regardless of changes in economic conditions. Even during economic recessions, health services companies can maintain a certain level of profitability.

Top 10 US Healthcare Stocks for Malaysian Investors

As of October 10th, based on the market value data of U.S. healthcare stocks (which fluctuate with stock prices), we have selected the best 10 representative stocks in their respective fields for Malaysian investors to consider, helping them explore potential investment opportunities.

1. Eli Lilly

Eli Lilly is considered one of the best healthcare stocks due to its leading position in the development of innovative drugs, particularly in the fields of diabetes, obesity, oncology, and neurodegenerative diseases. Its GLP-1 drug Tirzepatide has shown strong growth potential in the weight loss and blood sugar reduction market, and it continues to make progress in the development of multiple new indications.

Furthermore, the successful market performance of the new Alzheimer’s drug Donanemab has further driven up the company’s market value. The drug’s effectiveness in treating Alzheimer’s disease has been unanimously recognized by the U.S. Food and Drug Administration (FDA) advisory committee, enhancing its prospects for approval and market launch. Analysts predict that by 2030, Eli Lilly is expected to capture about half of the Alzheimer’s treatment market, with annual sales of Donanemab potentially reaching nearly $3 billion.

2. UnitedHealth Group

UnitedHealth Group is a leading diversified company in the health care sector in the United States, providing comprehensive health benefit programs and specialized information services to its customers through its two main business segments—UnitedHealthcare and Optum.

UnitedHealth Group’s financial reports indicate that the company achieved total revenues of $371.6 billion in 2023, a year-over-year increase of 15%, with a net profit of $22.4 billion, representing a year-over-year growth of 11.44%. This demonstrates the company’s strong profitability and robust growth trend. Furthermore, UnitedHealth Group has obtained strong bargaining power and cost control capabilities through its extensive healthcare resource network. The synergistic effect formed between health management services and insurance operations has improved user experience and reduced claim costs.

3. Novo Nordisk

Novo Nordisk is a global pharmaceutical company renowned for its innovations in the field of diabetes treatment, particularly holding a significant market share in the GLP-1 class of drugs. As the market continues to evolve, the company's dominant position is expected to strengthen further. With its breakthrough drug Wegovy in the obesity treatment sector, Novo Nordisk has established an industry-leading position, and as this market is anticipated to grow, the company is poised to maintain this advantage.

Furthermore, Novo Nordisk is committed to developing the next generation of revolutionary insulin therapies, including glucose-responsive insulin and cell therapies targeted at Type 1 diabetes. The company also boasts a robust pipeline of investigational products spanning a broad range of therapeutic areas, such as diabetes, obesity, rare diseases, and cardiovascular diseases. This pipeline will bring new growth opportunities and support the company's long-term development.

4. Johnson & Johnson

Johnson & Johnson is a multinational medical healthcare products company and one of the largest healthcare corporations globally. Its business encompasses three major areas: pharmaceuticals, medical devices, and consumer products. This diversified business structure helps the company maintain stable performance in various market environments and provides Johnson & Johnson with strong cash flow, ensuring its continued ability to pay dividends.

However, Johnson & Johnson's average dividend growth rate has been declining year by year. The dividend increase for 2023 was only 5.3%, the lowest level in many years. The company's reported performance for 2023 showed a 6.5% year-on-year increase in sales, reaching $85.2 billion, while net profit decreased by 18.6% year on year, to just $13.3 billion. Investors may need to more cautiously assess Johnson & Johnson's dividend prospects and profitability.

5. AbbVie

AbbVie is a globally recognized biopharmaceutical company focused on discovering, developing, and commercializing new approaches to treat serious illnesses, with significant contributions in key therapeutic areas such as immunology, oncology, and neuroscience.

AbbVie's core product portfolio, especially the biologics used for the treatment of autoimmune diseases and cancer, continues to be in strong demand in the market. Among the treatments under development, tavapazamab is expected to reach peak sales of around $1 billion, further enhancing the company's growth prospects. Additionally, AbbVie's investment in research and development continues to grow; the company has submitted a Biologics License Application to the U.S. Food and Drug Administration for Teliso-V, a potential new therapy for certain lung cancer patients.

6. Merck

Merck & Co. is an American multinational pharmaceutical company. As one of the world's leading healthcare companies, Merck is renowned for its innovative research and development in vaccines and prescription medications. The company has shown particular strength in oncology and vaccines. Its PD-1 inhibitor, pembrolizumab (Keytruda), has achieved significant clinical results across multiple cancer types, with sales reaching $25 billion in 2023, a year-over-year increase of 19%.

Furthermore, Merck has made substantial investments in research and development, with R&D expenses for the full year of 2023 amounting to $30.5 billion, a 125% increase from 2022. This high level of R&D investment ensures that the company will continue to introduce innovative drugs and treatment regimens in the future, maintaining its competitiveness in the market.

7. AstraZeneca

AstraZeneca is a globally recognized biopharmaceutical company focused on the research, development, production, and marketing of innovative medicines for the treatment of a variety of diseases. The company has a range of successful therapeutic drugs in oncology, cardiovascular diseases, diabetes, and rare diseases, which have become significant sources of revenue.

In 2023, through expansion in multiple therapeutic areas, including oncology, respiratory, cardiovascular and metabolic diseases, and rare diseases, the company's operating revenue has surpassed $45 billion, reflecting its success in innovation capabilities and strategic partnerships. Additionally, AstraZeneca has set a target of achieving $80 billion in total revenue by 2030 and expects to continue growing thereafter. This target demonstrates the company's confidence in its future development prospects and its grasp of market opportunities.

8. Thermo Fisher Scientific

Thermo Fisher Scientific is one of the world's leading life sciences companies, focusing on providing advanced technology solutions and services for research, pharmaceutical, biotechnology, and industrial markets.

Through a continuous strategy of "innovation + mergers and acquisitions + diversification," Thermo Fisher has rapidly grown into an industry leader. The company's R&D investment accounts for 3.6% of its sales. By acquiring Patheon, Brammer Bio, and PPD, among others, it has strongly positioned itself in the CDMO and CRO markets. These mergers and acquisitions have not only expanded the company's business scope but also enhanced its competitiveness in the field of biopharmaceutical services.

9. Abbott

Abbott is a diversified healthcare company with a strong market position and technological edge in the global diagnostics field. Its diagnostic products are widely used in clinical practice across various areas such as hematology, immunology, and genetics. Abbott also holds a leading position in the nutrition sector, particularly in the markets for infant formula and adult nutritional supplements.

Abbott's total revenue as of June 30, 2024, reached $20.341 billion, a year-over-year increase of 3.12%. Although net profit has declined, the company's revenue growth indicates the stability of its core business. Faced with pressure on profitability, Abbott is working to improve operational efficiency to reduce costs and thereby increase profit margins. Additionally, Abbott's return on equity (ROE) is 13.33%, which is higher than the industry average, indicating that the company is efficient in using its own capital.

10. Pfizer

Pfizer Inc. is a globally recognized multinational pharmaceutical corporation dedicated to the research, development, production, and marketing of innovative medicines and vaccines aimed at improving the health conditions of humans and animals. Pfizer's robust pipeline spans various therapeutic areas, from cardiovascular diseases to oncology. The COVID-19 vaccine Comirnaty, developed in collaboration with BioNTech, has been widely approved globally and achieved substantial sales during the pandemic.

Moreover, Pfizer's investment in research and development is substantial, with R&D expenditures in 2023 reaching $10.7 billion, approximately 18% of its total revenue. This continuous investment in innovation helps the company maintain its leading position in the pharmaceutical industry and lays the foundation for future growth.

How to Invest in US Healthcare Stocks from Malaysia

If you are interested in investing in U.S. healthcare stocks from Malaysia, here are some basic steps you can follow:

Choose a Trading Platform

First, you need to select an online trading platform that provides access to the U.S. stock market. Look for platforms that offer in-depth research tools and services, such as stock analysis tools, real-time news updates, and financial reports. Use a demo account to familiarize yourself with the platform's features and test your investment strategies before committing real money.

Open a Trading Account

Once you have chosen a trading platform, the next step is to create a trading account. This usually involves filling out a basic online form with your personal information, including your full name, residential address, and contact phone number. You will also need to provide tax-related information and disclose your investment experience and risk tolerance. In some cases, you may need to submit identification documents, such as a copy of your passport or utility bill, to verify your identity.

Research the Market

Before deciding which US healthcare stocks to invest in, thorough research is essential. Review the target company's financial health, including the balance sheet, income statement, and cash flow statement. Understand the company's business model, industry trends, and its competitive position in the market. Also, assess the company's growth potential, the strength of the management team, and the development of its products.

Execute Trade

Once your account is funded and you have completed your preliminary research, you can place an order to buy healthcare stocks through the trading platform. You can choose different types of orders, such as market orders, limit orders, or stop-loss orders. Using limited orders can help you control the purchase price and set stop-loss points to protect your investment from significant downturns.

Risk Management

During the process of holding stocks, it is crucial to continuously monitor and analyze the performance of your investment portfolio. This includes not only tracking the price fluctuations of the stocks but also regularly reviewing relevant company announcements, financial reports, industry dynamics, and any macroeconomic events or policy changes that could significantly impact the stock price.

By collecting and analyzing comprehensive information, you can more accurately assess the fundamental and technical conditions of the stocks, which can help you formulate reasonable strategies—whether to continue holding, timely reduce positions, or increase positions. Making decisions based on more comprehensive information can help achieve the goals of risk management and return optimization.

Invest US Healthcare Stocks with Moomoo MY

When considering investing in U.S. healthcare stocks, moomoo has become a popular choice among many investors due to its intuitive design and rich market data. Whether it's breakthrough developments in biotechnology, steadily growing pharmaceutical companies, or innovative healthcare service providers, you can find cutting-edge information about the U.S. medical and health industry through moomoo.

Easy to Operate

The moomoo platform is designed to be simple and intuitive so that both novice traders and experienced investors can quickly get started and easily navigate and trade stocks and other derivatives. The platform provides a clear operational flow and navigation to ensure that users have hassle-free access to the information and services they need. In addition, real-time updated market data enables users to catch the latest market developments and important trends in a timely manner.

Information Push

Moomoo is committed to providing users with the freshest financial news and in-depth research reports to help users maintain a high level of sensitivity to market dynamics. From the development of emerging technologies to changes in macroeconomic policies, this information can help investors better understand the market environment and thus make wiser investment decisions. Through customized push services, users can subscribe to news and reports in areas of personal interest.

Community and Educational Resources

To help users improve their investment skills, moomoo offers a range of free investment courses, covering basic theories to advanced strategies, suitable for learners at different levels. At the same time, moomoo has a vibrant online investor community where users can share their opinions, exchange insights with others, and discuss successful investment strategies together. This interaction not only promotes the spread of knowledge but also builds a supportive environment that encourages users to learn from each other and make progress together.

Conclusion

For Malaysian investors seeking to diversify their investment portfolios, U.S. healthcare stocks present an attractive option. Despite various challenges, the U.S. healthcare industry demonstrates strong growth potential due to its vast market size, high-end technological innovation capabilities, relatively stable policy environment, and diverse investment opportunities. Particularly, leading companies such as UnitedHealth Group, Eli Lilly, Novo Nordisk, and Johnson & Johnson have shown exceptional performance in their respective fields.

However, investing in U.S. healthcare stocks also requires careful research and prudent operations, including selecting the right trading platform, opening a trading account, conducting in-depth market research, and effectively managing investment risks. With proper planning and execution, Malaysian investors can find opportunities for stable growth and long-term returns in this sector.