Two Healthcare Stocks Worth Watching in 2025

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The S&P 500 continues its relentless march to new highs in 2025, with a modest 15.2% return so far. But the index’s big leap can mostly be credited to a select group of tech titans-the “Magnificent Seven”-who have, for better or worse, become the poster children of modern investing. Meanwhile, many other potentially great opportunities remain hidden beneath the glossy surface of market exuberance. Today, I’ll focus on two healthcare stocks that haven’t yet caught the wave of the bull market. Why? Because they’re still in the midst of doing something that really matters: innovating.

Zoetis: The Underdog in Animal Healthcare

Ah, Zoetis (ZTS). It’s the unsung hero of the pet and livestock healthcare world-bringing us drugs, vaccines, and diagnostic tools for everything from your average house cat to your average farm cow. With a portfolio of 17 blockbuster drugs that rake in over $100 million annually, Zoetis is hardly a fly-by-night operation. Still, the stock has seen better days. Since late 2021, its share price has plummeted 40%, thanks largely to a sudden drop in pet adoptions (and yes, we’re blaming the pandemic again).

At first glance, things seem bleak. Sales in one of Zoetis’ brightest growth areas, osteoarthritis meds for pets, fell 4% in its latest quarter. That’s a bit of a concern, especially considering that the company launched Librela for dogs and Solensia for cats just a year or two ago. But before you toss Zoetis onto the pile of “Do Not Buy” stocks, let’s take a closer look.

Management estimates there are more than 18 million dogs in the U.S. suffering from untreated osteoarthritis. And yet, only a small fraction-1 million, to be exact-are benefiting from Librela. This, my friends, is called “market opportunity.” It’s not a sure thing, but it’s a pretty big one. And here’s the kicker: 75% of past customers have reported being “very or extremely satisfied” with the results. As far as I’m concerned, that’s a pretty good endorsement for a product that still has plenty of room to grow.

The real hitch in Zoetis’ plan is convincing veterinarians that their monoclonal antibody products can stack up to the tried-and-true NSAIDs. Zoetis is already working on phase 4 trials and a bunch of third-party studies, so if those results come back strong in the next year or so, this could very well be the catalyst for a sales rebound. Until then, Zoetis continues to grow its sales by 8% annually-outpacing the rest of the animal healthcare industry, which hobbles along at 5%. And with a price-to-earnings ratio at a decade-low 25, Zoetis remains one of my top picks for the long haul.

UFP Technologies: The Quiet Giant of the Medical Device World

Next up: UFP Technologies (UFPT). If you haven’t heard of them, don’t feel bad. They’re not exactly a household name. But for anyone in the medical device industry, UFP is like the unassuming friend who always seems to know exactly what to say and when to say it. UFP specializes in designing, developing, and manufacturing everything from robot-assisted surgical drapes to revascularization devices-and that’s just scratching the surface. The company has partnered with 26 of the top 30 medical OEMs to create cutting-edge products for a variety of medical niches.

Unlike your average company, UFP’s revenue model is refreshingly predictable. The majority of its sales come from single-use, single-patient products-think surgical drapes or needleless injection port cleaners. These are items that need to be replaced over and over again, providing a steady stream of income. And with UFP’s track record of acquiring companies (22, to be exact) and expanding into new markets, it’s poised to keep growing-especially as the robot-assisted surgical industry expands at double-digit rates.

UFP is no stranger to impressive growth. Over the past decade, the company has increased its revenue and net income by 16% and 30%, respectively. And they don’t plan on slowing down. Management expects the company to grow sales by 15% over the next 3-5 years, fueled by acquisitions and booming industries like robot-assisted surgery. It’s been a 72-bagger since the turn of the century, and at a price-to-earnings ratio of 23, it’s still one of my favorite stocks to buy. If you’re looking for a steady performer that flies under the radar, UFP might just be your ticket.

Both Zoetis and UFP Technologies may not be the sexiest stocks on the block right now, but they’re steady, reliable, and-dare I say-underappreciated. And as any seasoned investor knows, sometimes the best opportunities are the ones that don’t scream for attention. 📈

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2025-10-05 12:21