The health care sector has provided stellar investment opportunities in recent years.

Over the last five years, the iShares U.S. Healthcare ETF (IYH | A-94) has outperformed the broader Dow Jones U.S. Index by more than 8 percent. Health care has increased more than 22percent per year while the broader U.S. market has increased at 16 percent per year.

Removing the annualized returns, IYH is up more than 177 percent in five years, while the Dow Jones U.S. Index has basically doubled. Both returns are very impressive. The question for health care investors is, will the outperformance continue?

More Upside Potential
The analysis below leads to the conclusion that health care stocks have potential for further upside, but most of the outperformance in the sector has already occurred.

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