Health care stocks have historically traded at a premium to the broader equity market, partly reflecting their growth characteristics and popularity as a source of income. Yet today some sub-industries such as biotech sell at a discount. Many trade near the bottom of their historical valuation range, as the Bargain bin chart shows.
Health care valuations vs. global stocks, 1996-2017
Sources: BlackRock Investment Institute, MSCI, Institutional Brokers' Estimate System and Thomson Reuters, March 2017.
Notes: The dots show the current premium or discount of selected health care sectors to the MSCI All-Country World Index, based on forward price-to-earnings estimates. The bars show the range between the 25th and 75th percentiles since 1996. A reading greater than one indicates a premium to the broader market; less than one reflects a discount. Services include distributors, service providers and facilities. Past performance does not guarantee future results. This information should not be relied upon as investment advice for any particular fund or security.
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