Australian health care sector is a “mixed system” and comprises of both public as well as private health care systems. Public health care consists of public hospitals, community-based services, and affiliated health organisations which are governed by state and territory governments. Private health care system comprises of health service providers that are owned and managed privately, and these include pharmacies and private hospitals.
Health care system represents adequate lucrative stocks with excellent growth prospect. In this article, we have discussed two health care stocks ResMed and Ramsay, which have achieved a good revenue in FY2019 (as compared to their last financial year).
Let’s discuss these two health care stocks in detail-
ResMed Inc (ASX: RMD)
A medical device company, ResMed Inc (ASX: RMD) is engaged in developing high-quality medical devices for providing a superior and healthier life to patients with sleep apnoea, COPD, and other chronic diseases. The Company has its software platform outside hospitals which helps health care professionals and attendants to cater to patients. ResMed provides its services in over 120 countries.
ResMed provides a product portfolio of devices, products for diagnosis, mask systems, devices for use in dental, and other cloud-based software informatics solutions.
On 24 October 2019, ResMed announced the results for its first quarter of FY20, ended on 30 September 2019.
Key highlights Q1 2020
- In its first-quarter 2020, the company received a revenue growth of 16% to $681.1 million.
- ResMed received an expanded gross margin of 120 bps to 59.5%.
- The net operating profit of the company increased by 19% with an increased non-GAPP operating profit of 22%.
- The company received GAPP diluted earnings per share of $0.83.
- The non-GAPP diluted earnings per share were $0.93.
Source: Company’s Report
Fourth Quarter 2019 Highlights
- An increase of 13% in revenue observed in the fourth quarter.
- The company received an expanded gross margin of 120 bps to 59.3%.
- There was a decline of 18% in net operating profit, and non-GAAP operating profit increased to 18%.
- A 5% increase in the dividend for this quarter, amounting $0.39 per share.
The Full Year 2019 Highlights
- For the last financial year, the revenue growth was 11% amounting to $2.6 billion.
- The company received an expanded Gross margin of 80 bps to 59.0% for FY2019.
- There was an increase in Net operating and non-GAAP operating profit which is 7% and 18% respectively.
Other Business and Operational Highlights
- ResMed launched AirFit P30i, which is its second top-of-head connected CPAP mask.
- The Company is expanding the mask portfolio with some additional options which provide more flexibility and will work according to users need for better sleep.
AirFit P30i; Source: Company’s Report
- ResMed is now providing an analytics suite for HMEs, and it will provide services to three new categories other than sleep therapy.
- In a conference (ATS 2019 International Conference and SLEEP 2019) ResMed sponsored a total of 40 studies.
The company’s stock settled the day’s trade at $20.650 on 25 October 2019, up by 11.02% with a daily volume of nearly 2,674,961 and a market capitalisation of approximately $26.66 billion. The stock has a 52 weeks high price of $21.450 and a 52 weeks low price of $12.650 and has delivered a return of 15.96% on a YTD basis and 29.26% in the last six months.
Ramsay Health Care Limited (ASX: RHC)
Sydney-based health care service provider Ramsay Health Care Limited (ASX: RHC) is one of the largest private health care operators across the globe. The company was established in 1964 and has over 50 years of experience in acute health care services like day surgery procedures, complex surgeries, psychiatric care and rehabilitation services (from 480 facilities across 11 countries). The company caters to Australia, France, the United Kingdom, Sweden, Norway, Denmark and others.
Annual General Meeting-
RHC would conduct an AGM on 14 November 2019 in the Grand Ballroom, Sheraton Grand Sydney. The leading Business key highlights of this meeting are-
- Consideration of Reports.
- Remuneration Report adoption.
- Election of Director candidate.
Key highlights of FY2019
Continuous business improvement was reported for Ramsay’s quality portfolio of hospitals.
Brownfield Capacity Expansion-
- RHC’s Board approved $244 million in new brownfield projects. By this approval company invested a total of $2 billion in Australia over the past 10 years.
- The Company is providing public hospital services through “public/private collaborations”, a significant component of its growth strategy.
- Ramsay plans to enter other businesses such as pharmacy and patient transport in Australia and France respectively, which will help in delivering better and consolidated services to patients.
Major acquisition in FY2019
The company acquired Capio, the pan-European healthcare company, and became the leading service provider of healthcare services in Europe.
- In FY2019 the total revenue of $11.4 billion was achieved, which is up 24.4% on the previous year.
- Ramsay’s brownfield programme in Australia achieved robust growth in the last financial year.
- A total of 16 projects completed in Australia during FY2019 which amount $242 million and consist of 333 new beds, 15 operating theatres and 30 consulting suites.
- The company forecast completion of $170 million worth of brownfields for FY2020.
Financial performance summary FY2019; Source: Company’s Report
The company’s stock settled the day’s trade at $69.100 on 25 October 2019, up by 0.02% with a daily volume of nearly 534,505 and a market capitalisation of $ 13.96 billion. The stock has a 52-week high price of $74.120 and a 52-week low price of $52.710. The stock has delivered a return of 19.60% on a YTD basis and 7.63% in the last six months.
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