The Best Healthcare Stock to Hold in Uncertain Times

As the U.S. emerges from its longest-ever government shutdown, tariffs continue to drag on the economy, inflation rates are heating up, and the Federal Reserve has resumed cutting interest rates to try to avoid the economy suffering a hard landing. Despite all this turmoil, the S&P 500 is trading near all-time highs, and the Shiller price-to-earnings (P/E) ratio of the index (which measures 10-year average earnings) sits above 40x -- approaching the valuation of the stock market just before the internet bubble burst in 2000.

In such uncertain times, investors seek safety and value in their stocks -- but where can you find it?

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Introducing GSK

Historically, healthcare has been a steady performer precisely because it's a product that everyone is going to need eventually. If you ask me, GSK (NYSE: GSK), the pharmaceutical giant formerly known as GlaxoSmithKline, is just the kind of healthcare stock you should be considering.

A strong performer already, GSK stock is trading up 44% in 2025, yet its stock remains a good bargain. GSK trades for a reasonable P/E ratio of just 13 and is the second-least expensive (by P/E) of the eight big international drug stocks. Yet, GSK generates so much cash from its business that its price-to-free-cash-flow ratio is just 11.1.

Analysts polled by S&P Global Market Intelligence believe GSK can grow its annual earnings by 8% on average over the next five years, and the stock pays a very respectable 3.3% dividend yield. At an expected total return ratio of less than 1.0, GSK stock looks like a buy to me.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool recommends GSK. The Motley Fool has a disclosure policy.