Which are the best pharma and healthcare in India right now?
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the pharma and healthcare sector?
As there is a constant demand for pharmaceutical products, stocks from the pharmaceutical sector provide stable earnings regardless of the state of the overall stock market. For this reason, they are often called defensive stocks and can protect your portfolio during bad times.
However, in a sustained bull run, these stocks will underperform the market. The best time to buy such stocks is when there is a gloomy picture on the economic front. Since defensive sectors are less prone to the above-mentioned risks, they offer lot of value in uncertain times.
What kind of dividend yields do pharma and healthcare stocks offer?
The pharma and healthcare sector does not have a consistent trend of dividend yields. Different companies have different dividend policies which vary depending on the owners discretion and the market scenario.
For more details, check out our list of top pharma and healthcare stocks offering high dividend yields.
What are the metrics used to evaluate pharma and healthcare companies?
A commonly used financial ratio in the valuation of pharma and healthcare stocks is the Price to Earnings Ratio (P/E).
One can also use Price to Earnings ratio (P/E) which compares a firm's market capitalization to its with its earnings per share. The higher the P/E ratio, the more overvalued the stock and vice versa.
To find stocks with favourable P/E ratios, check out our list of pharma and healthcare stocks with their P/E ratios.