In 2022, healthcare stocks surpassed the S&P 500. But in 2023, they are not doing so well. Nonetheless, during economic uncertainty, the healthcare industry can serve as a reliable defensive strategy since individuals typically do not cut back on prescription drug acquisitions, postpone medical procedures, or cancel appointments with doctors solely due to a sluggish economy.

In 2021, health spending in the U.S. rose by 2.7% to $4.3 trillion, or $12,914 per capita, significantly lower than the growth rate of 10.3% in 2020. Nonetheless, the Centers for Medicare and Medicaid Services predict that healthcare spending in the U.S. will have an average annual growth rate of 5.1% between 2021 and 2030. That will result in a total expenditure of $6.8 trillion. This projection offers excellent long-term investment opportunities in the sector.

Healthcare stocks are great if you are an investor looking for safer waters. Across the board, they are defensive investments that will do well in multiple scenarios. As a result, if you are among those that want more bang for their buck, healthcare stocks are enticing.

Here are three stocks we have curated for you to study if you want to invest in healthcare.

Zoetis (ZTS)

Zoetis (NYSE:ZTS) is a prominent player in the global animal health industry, focusing on developing vaccines, medicines, and diagnostics for veterinarians and livestock producers.

The company’s companion animal business is expected to drive long-term growth, particularly in the pet parasiticides market, which presents the biggest opportunity in animal health. Zoetis is also making significant strides in companion animal pain management, further solidifying its position in the industry.

With a diverse range of products, including medicine, vaccines, genetic tests, and other offerings, Zoetis generates approximately $8 billion in revenue annually. The majority of this revenue, over 60%, is generated from the companion animal segment. The division includes products for dogs, cats, and horses. The remainder of the revenue comes from Zoetis’ livestock segment. The company offers around 300 products. Out of the total, 15 key offerings generate at least $100 million in annual revenue.

The stock will do well due to the growth in pet ownership in the U.S. Pet industry expenditure exceeded $126 billion in 2021. The increase in pet ownership contributed to this growth. In 2020, 70% of American households owned one or more pets, up from 56% in 1988.

Considering these secular tailwinds, Zoetis is among the best healthcare stocks to buy.

CVS Health Corp (CVS)

As the largest pharmacy healthcare provider in the United States, CVS Health Corp (NYSE:CVS) has a strong balance sheet, impressive free cash flow, and an attractive valuation, according to some analysts. Furthermore, CVS’s shift from being a drug store retailer to a holistic healthcare provider offering insurance, prescription drug management, and primary care services differentiates it from its competitors.

With America’s largest pharmacy benefits management business under its belt, CVS Health has leveraged its extensive retail presence to support additional operations. One such operation is its health insurance benefits management, bolstered by the acquisition of Aetna for approximately $78 billion in 2018, making CVS Health one of the largest health insurance benefits management providers in the United States.

As America’s population ages, the demand for healthcare services will increase steadily. Many of these services are provided directly by CVS Health. The company already operates over 1,100 walk-in medical clinics. Its proposed acquisition of Oak Street Health for $10.6 billion will add hundreds of primary care providers working in 169 medical centers, further expanding CVS Health’s capacity to provide essential healthcare services.

In summary, CVS Health is set to achieve consistent and robust profit growth. This is because it can provide and oversee numerous health benefits directly. As a result, it presents an appealing prospect to investors for an extended period.

Abbott Laboratories (ABT)

Abbott Laboratories (NYSE:ABT) is a top medical device sector player. It also operates in other industries, such as nutrition and a generic pharmaceutical division focusing on developing nations. The company’s triumphs can be attributed to its ability to create superior products and generate increased revenue and profits.

As a diversified healthcare company, Abbott Laboratories holds a prestigious distinction as a member of the exclusive group known as the Dividend Aristocrats. These comprise stocks that have consistently raised dividends for at least 25 consecutive years.

Abbott investors experienced a dividend increase for the 51st consecutive year last year.

Abbott’s past achievements are fantastic. However, the future is more important. Its strength lies in its innovative culture, which is critical in the healthcare industry and continually demands breakthrough products. For instance, Abbott rapidly created and marketed several COVID-19 diagnostic tests, leading the market during the pandemic.

Another example is the FreeStyle Libre franchise, a continuous glucose monitoring system that enables diabetes patients to monitor their blood glucose levels in real time. In 2022, revenue reached $4.3 billion, increasing by around 16% from the year-ago period. Abbott projects the product line will generate revenue of $10 billion by 2028.

Abbott Laboratories’ dedication to innovation and growth is apparent. Its plans include introducing products in various areas, such as structural heart, heart failure units, and beyond. It will only bolster the bottom line and improve its standing among investors and consumers. This commitment underscores why it is one of the top healthcare stocks around.

On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.