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In fact, the healthcare sector is one of the largest in the U.S. economy. It makes up close to 20% of GDP. As the baby boomer generation gets older, there will be an increased need for pharmaceuticals, biotech therapies, and hospital stays. Approximately $3.5 trillion is spent on healthcare in the U.S., which is only expected to increase in upcoming years.
While healthcare stocks certainly deserve a place in your portfolio, it’s best to avoid stocks with high valuations. That’s why investors should consider healthcare stocks with an overall grade of Buy and a Value Grade of A in our POWR Ratings system. Three stocks that meet that criterion include Ironwood Pharmaceuticals, Inc. (IRWD), Nu Skin Enterprises, Inc. (NUS), and Bristol-Myers Squibb Co. (BMY), which is why I am highlighting them below.