Best Healthcare Stocks to Buy After the Market Pullback

Equity markets have moved in the wrong direction over the past three weeks. They may not rebound and experience a sustained run from here on out. We are still dealing with a precarious global trade environment and geopolitical issues. However, stocks will recover eventually, as they always do. And in the meantime, it might be a great idea to identify companies whose shares have dropped in recent weeks, but that still offer excellent long-term prospects. Consider the following two options: CVS Health (NYSE: CVS) and AbbVie (NYSE: ABBV). Here is why these are excellent healthcare stocks to buy after the recent pullback.

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1. CVS Health

After a strong performance in 2025, CVS Health has dealt with two major problems this year. First, the U.S. Centers for Medicare and Medicaid Services announced proposed Medicare Advantage (MA) payment rates for 2027, and they will increase, on average, by just 0.09% year over year (which is essentially no change at all), well below what many analysts had anticipated. If reimbursement rates aren't keeping up with rising medical costs, CVS Health's margins will shrink. As CVS's CEO, David Joyner, said:

The proposed rate simply does not match the level of medical cost trend in the industry.

Then, the company reported its fourth-quarter financial results, and although revenue growth was pretty strong, rising costs led to a post-earnings sell-off.

Can CVS Health overcome these issues? First, it's worth noting that the company has a diversified healthcare business that extends well beyond its insurance operations, which have been dealing with rising costs and shrinking margins. And although health insurance is a major part of the business, CVS Health was already planning to scale back its MA operations to focus on profitable growth.

Recent developments make that decision even more important. Management emphasized that the company remains committed to improving margins within its insurance business. My view is that CVS Health could navigate the current storm and perform well over the long run, as it leans on its vast retail footprints, deep relationships with patients and communities, and continued innovation to keep up with the changing demands of the retail landscape. CVS Health remains a top healthcare stock to buy.

2. AbbVie

AbbVie's shares have been a bit volatile this year. The stock dropped after it released its fourth-quarter earnings as investors are increasingly uncomfortable with how much the drugmaker still relies on Humira, which lost patent exclusivity in the U.S. in 2023. Humira remains the company's third-best-selling medicine, though its sales are declining.

How will AbbVie record consistent revenue growth once Humira's sales completely evaporate? Thankfully, the company's main growth drivers, Skyrizi and Rinvoq, are still performing extremely well. Management expects the two immunology drugs to combine for more than $31 billion in sales this year, far eclipsing Humira's peak revenue and already exceeding their 2027 guidance.

In the meantime, some of the company's other products -- like migraine treatment Qulipta and Botox Therapeutics -- are making steady progress, while it continues to develop newer ones. AbbVie's pipeline features such candidates as emraclidine, a highly promising asset aiming to treat schizophrenia. With a new mechanism of action, emraclidine could generate well over $1 billion in sales at its peak, if it earns approval.

And that's just one product. AbbVie's deep pipeline should lead to a much-improved lineup of approved medicines by the end of the decade. Lastly, AbbVie is especially attractive due to its dividend program. The company has increased its payouts for 54 consecutive years, which makes it a Dividend King, or a corporation with 50 or more consecutive annual payout increases. So, despite its recent slide, AbbVie is a top stock to buy and hold, especially for income seekers.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.