Healthcare Dividend Stocks For Higher Rates With Zimmer Biomet STERIS And Quest
With the Federal Reserve sending mixed signals on future rate cuts and hikes, inflation estimates edging higher, and oil prices reacting to conflict in Iran, many investors are taking a fresh look at large cap defensive dividend stocks. These companies, often in Consumer Staples, Utilities, and Healthcare, are commonly viewed as potential anchors when monetary policy and inflation expectations feel uncertain. This article focuses on how that backdrop connects to our US Large Cap Defensive Dividend Stocks screener and highlights 3 stocks that appear positively exposed to the current news, helping you assess where they might fit in a diversified portfolio.
Zimmer Biomet Holdings (ZBH)
Overview: Zimmer Biomet Holdings is a global medical technology company that designs and sells orthopedic implants for hips and knees, trauma and sports medicine devices, craniomaxillofacial and thoracic products, and a suite of digital and robotic surgery tools, such as the ROSA Robot and ZBEdge platform, that support surgeons before, during and after procedures.
Operations: Zimmer Biomet generates about US$5.3b in the Americas, US$1.9b in Europe, the Middle East and Africa, and US$1.3b in Asia Pacific, with roughly US$4.9b from the United States and US$3.5b from international markets.
Market Cap: US$17.3b
Zimmer Biomet stands out in this screener because it pairs a long-established orthopedic implant business with exposure to digital surgery and robotics, and it pays a regular dividend in a sector that tends to be less sensitive to interest rate swings and oil driven inflation. The company is focusing on higher margin technologies such as ROSA and connected care platforms. It is also returning capital through buybacks and maintaining Q2 2026 dividends, while absorbing a recent one off loss and carrying a meaningful debt load via new credit facilities. For investors watching Fed uncertainty and sticky inflation, a key question is whether Zimmer Biomet’s earnings recovery, robotics adoption and balance sheet discipline can outweigh these funding and execution risks.
Zimmer Biomet’s push into robotics and connected care sits alongside debt funded buybacks and a recent one off loss, so the real question is how that trade off looks in the 3 key rewards and 2 important warning signs
STERIS (STE)
Overview: STERIS is a healthcare equipment and services company that focuses on infection prevention, supplying hospitals, pharmaceutical and bioprocessing facilities with cleaning and sterilization chemistries, washers and sterilizers, surgical tables and lights, and ongoing maintenance and outsourced sterile processing services.
Operations: STERIS generates about US$4.2b from Healthcare, US$1.1b from Applied Sterilization Technologies, and US$588.8m from Life Sciences, with roughly US$4.3b from the United States and US$1.5b from other international markets.
Market Cap: US$20.5b
STERIS attracts attention in a world of sticky inflation and uncertain Fed policy because much of its business is tied to recurring consumables and services that hospitals and drug makers rely on regardless of the rate cycle. The company also pays a regular dividend and has a large cap profile that may appeal to some defensive investors. Analysts currently forecast earnings and revenue to grow at mid to high single digit rates, supported by demand for infection control, a growing order backlog and expansion in higher margin, recurring revenue lines, even as investors weigh tariff exposure, reimbursement pressure and reliance on acquisitions. With the stock recently trading below some estimates of fair value and management committing to buybacks and steady dividends, the key question is whether the current pricing fully reflects both the inflation related cost risks and the resilience of STERIS’s platform earnings.
STERIS’s recurring hospital and pharma revenue, combined with its dividend profile, often gets attention, but the real tension is how inflation and tariffs could reshape the story in the 3 key rewards and 1 important warning sign
Quest Diagnostics (DGX)
Overview: Quest Diagnostics is a large US healthcare company that runs a broad network of laboratories, patient service centers and at home testing infrastructure, providing routine and advanced diagnostic tests, pathology services and health data solutions for doctors, hospitals, insurers, employers and consumers.
Market Cap: US$25.2b
Quest Diagnostics may be worth a close look for investors interested in a large cap healthcare stock with a long operating history, a dividend and a business model that can hold up when rates stay higher for longer. The company recently reported over 10% organic revenue growth and nearly 20% adjusted EPS growth in Q2 2026, raised full year guidance and is using buybacks alongside a 1.51% yield to return capital, while trading below some estimates of fair value. At the same time, high debt levels and new 5.000% senior notes make the cost of funding more important if monetary policy tightens, especially as Project Nova spending and higher fuel costs feed into expenses. How those trade offs stack up against its margins, oncology offerings such as Haystack MRD and expanding partnerships is likely to be central to any assessment of whether Quest Diagnostics fits within a defensive dividend-focused portfolio.
Quest Diagnostics’ accelerating Q2 2026 revenue and EPS, plus oncology tools like Haystack MRD, suggest the story is still building, but the real twist sits in the analyst forecasts for Quest Diagnostics
The three US large cap defensive dividend stocks in this article are just a starting point, as the full US Large-Cap Defensive Dividend Stocks screener surfaces 14 more companies in the US Large-Cap Defensive Dividend Stocks screener with equally compelling income profiles and business stories. Use Simply Wall St to identify, analyze and filter for the specific catalysts and narratives that matter to you so you can focus on the highest conviction dividend ideas in this group.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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