3 Healthcare Stocks – RHC, RMD And SHL

Ramsay Healthcare Limited (ASX: RHC)

Ramsay Healthcare Limited (ASX: RHC) has recently presented its Ramsay Health Care UK business prospect in the investor day program and highlighted about 1HFY19 activity and its growth strategy. According to the presentation, the management of the company is affirmative on its UK operation with respect to favourable growth in price and volume in FY19. Also, the management is expecting the rise in tariffs from the 1st of April 2019. The government of the UK has also renewed commitment to patient choice and use of independent providers to cut waiting times.

The company has reported 1H FY 2019 results, its Core NPAT up 1.0% to reach $290.8 million & also the EBITDA was up 9.8% to arrive at $728.6 million. This growth was achieved on the back of volume growth and sustained focus on making operational efficiencies.

As regards the outlook for FY19, the company seems to be well positioned to meet growth in demand and respond to market challenges on the back of its Scale, Diversity and Quality of its portfolio. The company’s brownfield programme is on track to deliver $242 Mn in completed projects in FY19. The company has a Strong pipeline of brownfield opportunities.

RHC’ shares traded at $64.850 with the market capitalisation of $ 13.15 Bn. The stock generated a YTD return of 12.62% and 19.61% return over the past three months as at March 14, 2019. Thus, considering the decent outlook, constant growth in the pipeline of brownfield projects, the stock has garnered good response from the market participants.

ResMed Inc (ASX: RMD)

ResMed Inc (ASX: RMD) has lately disclosed that it has reached on a consensus to settle all disputes with M/s Fisher & Paykel Healthcare on all the matters concerning the patent infringement between both the parties for venues across the globe. This settlement involves no payment by either of the parties.

During the Q2 FY19, the company’s revenue rose by 8% to come in at $651.1 million, thus witnessing a rise of 9% on a constant currency basis. This rise was on the back of surging sales across the company’s mask and device product segments in the United States of America, Canada, and Latin American regions. Gross margin has risen by 70 bps over the pcp, to come in at 58.90%. This rise was primarily on the back of benefits garnered from manufacturing and procurement efficiencies, improved product mix and higher margin contribution from MatrixCare, partially offset by declines in average selling prices.

RMD’s shares traded at $14.10, down by 2.959% during the day’s trade, with a market capitalisation of $20.82 Bn as on March 15, 2019. The stock generated a YTD return of -9.16% and 3.71% return over the past one month. Thus, considering the decent revenue growth across geographical regions, the stock has garnered good response from the investors.

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare Limited (ASX: SHL) has for 1HFY19, reported Revenue from ordinary activities which was up by 8.50% on pcp. This rise was on the back of the fact that Laboratory division achieved revenue growth of 10% in the half year.

The underlying EBITDA grew 7% and came in at $ 485 Mn. The Pathology Trier acquisition boosted the EBITDA growth in the Laboratory division. The US, Australian and Swiss laboratory businesses performed particularly strongly. Sonic’s Imaging business reported moderate earnings growth following strong growth in the prior year.

The Board of Directors declared an ordinary dividend of AUD 0.33, the record date for which was March 11, 2019, & the Payment Date should be March 26, 2019.

As regards the outlook, the company is well set for ongoing strong growth. It has a rich pipeline of acquisitions, joint ventures and contracts ahead. The company has enough geographical diversification that provides ample growth opportunities and risk mitigation. The management’s procurement and other synergy initiatives will be delivering benefits in the future.

SHL’s shares traded at $24.52, up by 0.451% during the day’s trade, with a market capitalisation of $11.57 Bn as on March 15, 2019. The stock generated a YTD return of 11.97% and 3.04% return over the past one month as of March 14, 2019.


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