These U.S. large-cap stocks that should offer great valuations and low volatility. Since bottoming in late December, the U.S. markets have risen sharply, led by strong economic data, optimism for a Chinese trade deal and solid, if not stellar fourth-quarter earnings. In 2019, the S&P 500 has risen about 6 percent with some sectors like technology and financials up more than 10 percent. One sector which has lagged the overall market is health care – only up 4 percent in the past month and down 12 percent in the past year.
1. Merck & Co. (ticker: MRK).
“The list of companies matching the above screen contains an outsized number of pharmaceutical companies – due mainly to their low valuation levels. One of the largest of these is Merck & Co., with a forward P/E ratio of 17.1 and a five-year EPS growth rate of 8.2 percent.
2. Zimmer Biomet Holdings (ZBH).
Medical device maker Zimmer Biomet Holdings also passes the screen with a market cap of $21 billion and a forward P/E ratio of just 13.2. After hitting a 52-week high last September, the stock went on to lose more than a quarter of its value by late December. Despite rallying in January, the stock still looks very reasonably valued in an overall expensive industry. A consensus of industry analysts also rates the company a “buy.
3. UnitedHealth Group (UNH).
“The largest company to make this list is health insurance and managed care provider UnitedHealth Group (UNH) with a market cap of more than $255 billion. After a strong run upward over the past five years, the stock took an atypical nosedive in December, selling off almost 20 percent in three weeks. The stock has recovered some in the past month but still trades at a reasonable forward P/E ratio of 20.9.
4. Biogen (BIIB).
Biotechnology firm Biogen is the only biotech stock to make this list. Often, biotech stocks have little to no earnings and have very high P/E valuations. Biogen is a more established player in the biotech space having been in business since 1978. Biotech specializes in therapies for autoimmune diseases and neurodegenerative conditions such as multiple sclerosis.
5. Stryker Corp. (SYK).
Biotechnology firm Biogen is the only biotech stock to make this list. Often, biotech stocks have little to no earnings and have very high P/E valuations. Biogen is a more established player in the biotech space having been in business since 1978. Biotech specializes in therapies for autoimmune diseases and neurodegenerative conditions such as multiple sclerosis