During difficult financial times investors traditionally invested in banking stocks as one way of weathering the storm, however times have changed and equity investors look to alternative ways of making a profit.
One alternative is the Biotechnology and Pharmaceutical sector and although Pharmaceutical companies have faced challenges, the healthcare sector has outperformed the overall market.
Making a profit has not been easy for this investment sector as generic competition for drugs come off patent together with declining research and development productivity, and regulatory pressures have been some of the difficulties that the market has faced.
In response, companies have been making acquisitions, diversifying their product lines and reducing research and development operations. In coming years, China and other emerging market countries will become important markets for many of the established global healthcare companies. Valuations remain attractive and many of the larger companies are growing their dividends, whilst already carrying well above-average dividend yields. In addition, further cash is being returned to shareholders in the form of share buybacks.