Health Care

The Health Care Sector encompasses two main industry groups. The first includes companies who manufacture health care equipment and supplies or provide health care related services, including distributors of health care products, providers of basic health-care services, and owners and operators of health care facilities and organizations. The second regroups companies primarily involved in the research, development, production and marketing of pharmaceuticals and biotechnology products.

Last % Change Market Cap Market Weight Weighting Recommendations
S&P Capital IQ Ned Davis Research (PDF) Log in required.
+3.82% $5.23T 15.63% Overweight +0.10%

Sector Commentary from Standard & Poor's

<p>CFRA recommends overweighting the S&P 500 health care sector. Year to date through March 10, 2020, the S&P 500 health care index, which represented 15.0% of the S&P 500 index, was down 6.8% in price, compared with a 10.8% decline for the S&P 500. In 2019, this sector index gained 18.7% versus a price increase of 28.9% for the 500. There are 10 sub-industry indices in this sector. Pharmaceuticals is the largest, representing 32.6% of the sector's market value, while health care technology is the smallest, accounting for 0.6% of the sector.</p><p>The cap-weighted average of this sector's component company CFRA STARS (STock Appreciation Ranking System) is 3.8 out of 5.0, as compared to a cap-weighted average of 3.7 for the S&P 500. In addition, 42% of the stocks in the sector have favorable investment recommendations versus 39% for all companies in the S&P 500. The sub-industries within this sector that currently show the highest average STARS are health care services, life sciences & tools, managed health care, and pharmaceuticals. Those with the lowest average STARS include biotechnology, health care facilities, health care supplies, and health care technology. According to S&P Capital IQ consensus estimates, the sector recorded a 9.2% year-over-year increase in operating earnings per share in 2019, as compared with the S&P 500's EPS gain of 1.3%. Sector EPS are projected to advance 6.1% in 2020 versus a 4.1% expected increase for the S&P 500. In addition, revenues for the sector are increased by 12.4% in 2019 and are projected to increase by 9.9% in 2020 versus the S&P 500's rise of 3.1% and 4.9%, respectively. The sector's price-to-earnings ratio of 15.1x, based on S&P Capital IQ consensus forward-12-month operating EPS estimates, is below the S&P 500's forward P/E of 16.9x. S&P Capital IQ also reports that the S&P Capital IQ consensus long-term EPS growth estimate for this sector is 10.2% versus the S&P 500's 11.6%, giving the sector a P/E-to-projected EPS growth rate (PEG) ratio of 1.5x, which is equal to the broader market's PEG of 1.5x. Finally, this sector pays a dividend yield of 1.9%, as compared with the yield of 2.2% for the S&P 500.</p><p>Finally, the CFRA proprietary reward rating input for the corresponding S&P 500 sector ETF is slightly positive, driven by the relative attractiveness of its underlying holdings and its recent performance record.</p><p>/Sam Stovall<p>


Understanding Weighting Recommendations

Sector weighting recommendations are provided by independent, third-party research firms to help further refine your analysis.

Some sectors get "over," "market," or "under" weighted, which means that the research firm recommends that more, the same, or less of the sector should be held in your portfolio than is held in the market.

Learn more about the average recommendation holding period and methodology of the research firms:

View weighting recommendations for all sectors


U.S. Sectors & Industries Performance is represented by the S&P 500 GICS® (Global Industry Classification Standard) indices. Last % change is the nominal change in the price of the index from the previous trading day's close expressed as a percentage as of the index value at the time noted in the Date & Time field. All dates and times are reported in ET.

Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol. Chart Performance figures may vary slightly from 1 Year % Change due to different timeframes used in chart calculations.

GICS is an industry classification system developed by Standard & Poor's in collaboration with Morgan Stanley Capital International (MSCI). S&P uses GICS to determine the market segment to which a company is assigned. A company is assigned to a single GICS industry according to the definition of its principal business activity as determined by Standard & Poor's and MSCI. Revenues are a significant factor in defining principal business activity; however, earnings analysis and market perception are also important criteria for classification. There are currently 10 sectors and 68 industries. Three of the 68 industries do not have companies represented in the S&P 500 Index; therefore, performance is not available for Marine, Transportation and Infrastructure, and Water Utilities.

Standard & Poor's 500 (S&P 500) Index is an unmanaged market-weighted index of 500 of the nation's largest stocks from a broad variety of industries. The S&P 500 represents about 80% of the total market value of all stocks on the New York Stock Exchange. Market-weighted means that component stocks are weighted according to the total value of their outstanding shares.

Indexes are unmanaged, statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lower performance. It is not possible to invest directly in an index.

Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol.

Market Cap is the sum of the market value of each company assigned to the applicable GICS sector or industry. Market value or capitalization is calculated by multiplying the number of common shares outstanding by the market price per share at the end of each trading day.

Market Weight is updated weekly from S&P Capital IQ and represents the sum of the market cap of the companies in the applicable S&P 500 GIC sector index as a percentage of the total S&P 500 Index market capitalization.

Fundamental data is the cap weighted average (or industry standard method) of the most current value available at the end of each trading day for each company assigned to the applicable GICS sector or industry.

News, commentary, market data and research reports are from third-party sources unaffiliated with Fidelity, unless otherwise noted, and are provided for informational purposes only. Fidelity does not endorse or adopt third party content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Past performance is no guarantee of future results.