AltaVista estimates XLV’s 2014 P/E to be 17.3 with a book value of 3.4, but sees those numbers falling to 15.5 and 2.9 in 2015.
XLV is attractive on other fundamental metrics as well. For example, the average payout ratio of the ETF’s constituents is just 28.8% while net margins are expected to rise this year and next year, according to AltaVista data.
While XLV does allocated 18.6% of its weight to biotech stocks, the ETF has remained firm due to its exposure to blue chip pharmaceuticals stocks. Johnson & Johnson (NYSE: JNJ) and Merck (NYSE: MRK) are two of just six members of the Dow Jones Industrial Average with double-digit year-to-date gains. [Key Differences Among Sector ETFs]
Additionally, XLV could be worth evaluating now because the ETF is historically the second-best of the nine sector SPDRs in the month of June, though the gains are usually small. [Sector ETF Ideas for June]
Health Care Select Sector SPDR
