Big names in finance are increasingly sounding the alarm on the possibility of a recession; the investment chief of Morgan Stanley's wealth management business, for instance, recently put the risk of a recession at more than 50%. While no one knows for certain what the future holds, there is a real possibility that equity markets could see further downsides in the months to come. 

Therefore, now is the ideal time to prepare your investment portfolio for such an event. The non-discretionary nature of healthcare makes it a particularly great sector, especially in a tough economy. Let's take a look at two wonderful healthcare stocks to buy now and hold over the long run.

Person shops at a pharmacy.

Image source: Getty Images.

1. Humana

With nearly 27 million members enrolled in its medical, dental, vision, and Medicare coverage, Humana (HUM 0.76%) is one of the largest health insurers in the world. 

Humana produced $83.1 billion in revenue for the year ended 2021, a 7.7% growth rate over the year-ago period. Thanks to the increased revenue base and share repurchases, the health insurer's non-GAAP (adjusted) diluted earnings per share (EPS) surged 10.1% higher to $20.64 in 2021. With a 14% annual earnings growth rate projected for the next five years, analysts believe that the company's growth will accelerate well beyond 2021.

This expectation is in part due to the fact that the global health insurance industry is positioned to grow at an impressive rate for the foreseeable future. As health insurance awareness surges in more rural areas and medical costs rise across the board, more consumers will turn to health insurance industry leaders like Humana to assume risk on their behalf. This is why the research firm Allied Market Research anticipates the global health insurance industry will increase at a 9.7% compound annual growth rate (CAGR) from 2021 to 2028, when it is expected to reach $4.2 trillion in value.

What's more, Humana has proven itself to be a highly profitable health insurer over the years. The company's benefits expense ratio -- defined as medical claims divided by premiums -- was solid for a health insurer at 86.7% in 2021.

Humana's 0.7% dividend yield is well below the 1.6% yield of the S&P 500 index, making it a stronger play for investors who have time to let those dividends compound. At a forward price-to-earnings (P/E) ratio of 19.3, the stock is also sensibly valued for long-term investors.

2. Stryker

Stryker (SYK -0.07%) is among the biggest medical device companies on the planet, impacting over 100 million patients each year across more than 75 countries. A diversified portfolio of quality medical devices in therapy areas ranging from orthopedics to neurotechnology and more gives the company an enormous competitive advantage. This explains how Stryker has outperformed its peers in the medtech market for each of the last three years, boasting organic sales growth of 7.2% in 2021 compared to the industry average of 6% that same year. 

Due to the aging global population, demand for Stryker's medical devices should only increase over time. In fact, Precedence Research predicts that the global medical devices market will post a 5.5% CAGR, from $550 billion in 2021 to $850 billion by 2030. Along with Stryker's above-average growth rate, this explains why analysts are forecasting 7.9% annual earnings growth over the next five years.

The stock's 1.4% yield is a bit lower than that of the S&P 500 index. But Stryker's high-single-digit annual earnings growth and its estimated 2022 dividend payout ratio of 28.8% together compensate for the lower starting yield. As a bonus, investors can purchase the stock at a forward P/E ratio of 20.8 -- hardly an expensive valuation for its quality.