From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 12.3%. This performance was noticeably worse than the S&P 500’s 1.9% fall.

Investors should tread carefully as the influx of venture capital has also ushered in a new wave of competition. Taking that into account, here are three healthcare stocks we’re swiping left on.

BD (BDX)

Market Cap: $48.91 billion

With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE: BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.

Why Do We Think Twice About BDX?

1. Annual sales growth of 4.1% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
2. 10.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

BD is trading at $170.95 per share, or 11.4x forward P/E. To fully understand why you should be careful with BDX, check out our full research report (it’s free).

Chemed (CHE)

Market Cap: $8.28 billion

With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Why Does CHE Fall Short?

1. 4.6% annual revenue growth over the last five years was slower than its healthcare peers
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.9 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

At $568.39 per share, Chemed trades at 22x forward P/E. Dive into our free research report to see why there are better opportunities than CHE.

Revvity (RVTY)

Market Cap: $10.73 billion

Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE: RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.

Why Is RVTY Risky?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 8.8 percentage points
3. Eroding returns on capital suggest its historical profit centers are aging

Revvity’s stock price of $91.03 implies a valuation ratio of 17.6x forward P/E. If you’re considering RVTY for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.