The average healthcare stock has a yield of just 1.8%, which isn't much to write home about today. You can do much better than that with Medtronic (MDT 3.59%), currently yielding 3%, or if you're really income-hungry, Alexandria Real Estate Equities (ARE -1.03%), now at 6.9%.
Here's why these two high-yield healthcare stocks could be buy-and-hold candidates for your income portfolio right now.
Medtronic is moving in the right direction
A $1,000 investment in Medtronic will get you around 10 shares of the medical device giant. It has operations in the cardiovascular, neuroscience, medical-surgical, and diabetes arenas, and is a major player in every niche in which it operates. It also has a long history of success that's highlighted by the company's 48-year streak of annual dividend increases, which puts it just two years away from Dividend King status.
That dividend streak is really important because it shows that Medtronic knows how to survive through both good and bad times. Indeed, a company can't create a record like that without having successfully muddled through a few rough patches. The 3% dividend yield is historically high today, which signals that Medtronic is going through another rough patch. What's happening right now, however, isn't unusual.
Medtronic's business is heavily dependent on research and development. R&D is notoriously lumpy, and recent years haven't been great for new product launches. But new products are starting to get introduced, which should help boost growth.
Meanwhile, costs have become an issue. It's normal for a large company to experience bloat, and Medtronic is looking to slim down and refocus around its most profitable businesses; the next big move is the spinoff of its diabetes business in 2026. The move is expected to be accretive in the first year, highlighting management's focus on profitability.
Image source: Getty Images.
In other words, Medtronic is doing what it should be doing -- and that is what it has long done as a business. If you have a buy-and-hold mentality, putting $1,000 to work in Medtronic today could be a great long-term investment choice.
Alexandria is an industry-leading healthcare landlord
You can buy around 12 shares of Alexandria Real Estate Equities with $1,000. It's a real estate investment trust (REIT) that focuses on owning medical offices. But that description doesn't do it justice, because those medical offices are highly specialized around medical research. They're vastly different from doctors' offices, given the technology needed to support healthcare research and development.
Alexandria has long focused on building clusters -- a number of buildings located near each other -- in areas where medical research is a major industry. That helps with costs, and also helped to solidify the REIT as a leading property owner in its chosen niche.
That said, Alexandria is in a bit of a transition period right now, as it looks to slim down to its best assets amid a broader slowdown in the medical-office space. A few large move-outs have also hampered results, with occupancy down to roughly 91% at the end of the second quarter of 2025, from about 95% at the end of 2024.
Investors are worried, which isn't unreasonable, since adjusted funds from operations (FFO) per share fell slightly year over year in the second quarter. Still, the $2.33 per share in adjusted FFO is more than enough to cover the $1.32 per share in quarterly dividends.
While it's true that office space requires more cash investment than many other property types, there is material leeway for adversity for Alexandria. And given that the dividend has been increased annually for 15 straight years, it seems highly likely that the board will look to support the dividend through this weak patch.
Note, too, that the balance sheet is in very strong shape and the company doesn't have any material near-term debt maturities on the horizon. If you don't mind buying when others are fearful, this REIT looks like an attractive income opportunity.
The right time to buy is often the hard time to buy
It's easy to buy stocks that everybody loves, but just following the crowd can lead to bad investment choices. That's why it often pays to go down a less crowded path, buying well-run businesses when they're facing hard times.
That's exactly the case with both Medtronic and Alexandria Real Estate Equities today. History suggests that both have a good chance of breaking out of their current funk. And that makes them strong buy-and-hold investment choices for long-term dividend investors.
