- The companies belonging to the healthcare sector are active all year round, irrespective of the global economic condition
- The demand for healthcare looks set to increase significantly in the coming years because of the increasing prevalence of major health issues, an ageing population, and rising wealth in emerging markets
- There are many healthcare stocks on the FTSE which have been providing good yearly returns
Sector such as the health care tends to perform well during recessions, and stocks of these sectors offer great returns even in challenging times like the present Covid-19 pandemic scenario. The healthcare sector has become more relevant than ever with the world racing to develop a cure or a treatment for the virus.
Different Types of Healthcare Stocks
The healthcare sector is a broad industry which constitutes of several different kinds of stocks. Among them, four of them are of utmost importance. They are as follows:
Drug stocks: Pharmaceutical companies which focus on developing drugs for treating diseases are known as drug stocks.
Medical device stocks: Companies which are involved in manufacturing medical device to take care of the patients are medical device stocks.
Payer stocks: Payers include health insurers and pharmacy benefits managers (PBMs).
Healthcare provider stocks: Healthcare providers include hospitals, physician practices, home health companies, and long-term care (LTC) facilities which deliver healthcare services to patients.
Why Invest in Healthcare Stocks?
In times of political or economic instability, investing in healthcare stocks is a popular trend. The companies belonging to the healthcare sector are active all year round, irrespective of the global situation. For instance, given the Covid-19 crisis, healthcare companies have been through an increasing demand as they provide products and equipment, in turn, increasing their share price and value.
When it comes to looking at sectors that have long-term growth potential, the first thing that strikes the mind is the healthcare stocks. Factors such as the increasing prevalence of major health issues, an ageing population, and rising wealth in emerging markets are dominant structural forces. Hence, the demand for healthcare looks set to increase significantly in the coming years.
British investors have many options to choose from in terms of healthcare stocks. There are plenty of investment opportunities if one is looking to invest in a large-cap FTSE 100 healthcare stock, mid-cap or small-cap healthcare stock is under-the-radar.
Let’s take a look at 10 FTSE healthcare stocks of the UK under the spotlight :
Hikma Pharmaceuticals PLC (LON: HIK)
Hikma is engaged in developing, manufacturing and marketing a variety of generic and in-licensed products. There was an increase of 9 per cent and 15 per cent in the core Group revenue and core operating profit respectively during the first half of 2020, driven by a strong performance in all of its three segments, especially Injectables.
The stock was trading at GBX 2,674.00 on 19 October 2020 at 12:49 PM, down by 0.41 per cent from its previous close of GBX 2,685.00. At the time of writing, the 1-year stock return of HIK was 36.64 per cent.
AstraZeneca PLC (LON: AZN)
The global biopharmaceutical firm is indulged in finding, developing, and commercialisation of prescribed drugs. The British drug-maker which is involved in developing Covid-19 vaccine-AZD1222, has secured several supply deals. The company had halted its Phase 3 clinical trial in September 2020, which resumed 3 days later. However, the U.S. Food and Drug Administration (FDA) is still to give approval for recommencing the late-stage clinical trial.
To Know More, do Read: AstraZeneca Share Price Topples as FDA Widens its Inquiry on COVID-19 Vaccine
The stock was trading at GBX 8,192.00 on 19 October 2020 at 13:07 PM, down by 0.22 per cent from its previous close of GBX 8,217.00. At the time of writing, the 1-year stock return of AZN was 22.11 per cent.
ConvaTec Group PLC (LON: CTEC)
Based in United Kingdom, ConvaTec is a medical product and technology company focusing on therapies for the treatment of chronic conditions. Robust growth in Continence and Critical Care and Infusion Care Group resulted in an increase of 2.1 per cent in revenue to $908 million on a reported basis. The adjusted EBIT margin increased to 20.0 per cent in H1 2020 ending 30 June 2020 (H1 2019: 18.6 per cent).
The stock was trading at GBX 183.60 on 19 October 2020 at 13:39 PM, up by 0.16 per cent from its previous close of GBX 183.30. At the time of writing, the 1-year stock return of CTEC was 0.71 per cent.
Alliance Pharma PLC (LON: APH)
Alliance Pharma is a specialty pharma company which is involved in the purchase, marketing and distribution of pharmaceutical products. Kelo-cote™ saw an increase in revenue which was up 8 per cent in H1 2020 ending 30 June 2020, driven by strong performance from Consumer Healthcare brands.
The stock was trading at GBX 75.50 on 19 October 2020 at 14:00 PM, up by 0.13 per cent from its previous close of GBX 75.40. At the time of writing, APH was providing 1 Year stock return of 5.01 per cent.
Ergomed PLC (LON: ERGO)
A provider of drug development services to the pharmaceutical industry, Ergomed’s business is classified into two segments- clinical research services (CRS), and drug safety and medical information services (DS&MI). The overall revenue was up by 14.8 per cent to £40.4 million (2019: £35.2 million) in H1 2020 ending 30 June 2020, because of a strong order book combined with significant new business won.
The stock was trading at GBX 817.00 on 19 October 2020 at 14:15 PM, up by 0.25 per cent from its previous close of GBX 815.00. At the time of writing, ERGO was providing 1 Year stock return of 163.75 per cent.
Bioventix PLC (LON: BVXP)
Bioventix PLC is a biotechnology company of the United Kingdom involved in the development and supply of antibodies. The company generated revenue of £10.31 million for the year ending 30 June 2020, increasing by 11 per cent (2018/19: £9.29 million). The vitamin D antibody called vitD3.5H10 was a significant source of revenue.
The stock was trading at GBX 4,275.00 on 19 October 2020 at 14:23 PM, up by 3.01 per cent from its previous close of GBX 4,150.00. At the time of writing, BVXP was providing 1 Year stock return of 23.15 per cent.
Novacyt SA (LON: NCYT)
Located in France, Novacyt SA develops and markets solutions devoted to the field of molecular biology and liquid-based cytology. The consolidated unaudited revenue of the Group increased over 900 per cent to €72.4 million in H1 2020 ending 30 June 2020 (H1 2019: €7.2 million) because of the COVID-19 PCR testing, leading to an increased customer base.
The stock was trading at GBX 910.00 on 19 October 2020 at 14:33 PM, down by 2.05 per cent from its previous close of GBX 929.00. At the time of writing, NCYT was providing 1 Year stock return of 23.15 per cent.
Dechra Pharmaceuticals PLC (LON: DPH)
Established in 1997, the Company is engaged in development, manufacture and marketing of products for veterinarians. In the year ending 30 June 2020, the company reported revenue growth of 6.8 per cent to £515.1 million (2019: £481.8 million)
The stock was trading at GBX 3,452.00 on 19 October 2020 at 14:43 PM, down by 0.75 per cent from its previous close of GBX 3,478.00. At the time of writing, DPH was providing 1 Year stock return of 35.23 per cent.
Genus PLC (LON: GNS)
It is an animal genetics company. In the year ending 30 June 20202, the company witnessed an increase in the revenue to £551.4 million, up 12.88 per cent (2019: £488.5 million) due to high breeding stock sales and royalties in China as customers replenished ASF impacted herds.
The stock was trading at GBX 4,114.00 on 19 October 2020 at 14:49 PM, down by 0.15 per cent from its previous close of GBX 4,108.00. At the time of writing, GNS was providing 1 Year stock return of 38.97 per cent.
Abcam PLC (LON: ABC)
Estbalished in 1998, Abcam is a global life sciences company of Cambridge, UK. In the year ending 30 June 2020, the company witnessed a slight increase in the reported revenue to £260.0 million, up 0.03 per cent (2019: £259.9 million) due to the impact of the global Covid-19 pandemic on regional performance, leading to partial or full shutdowns, and subsequent reopening, of academic and biopharmaceutical research laboratories.
The stock was trading at GBX 1,312.00 on 19 October 2020 at 15:03 PM, down by 0.23 per cent from its previous close of GBX 1,315.00. At the time of writing, ABC was providing 1 Year stock return of 14.05 per cent.
High yielding dividend stocks may be a good bet amid lower Government Bond yield regime.
With yields on UK government bonds are at a record low, stocks with higher dividend yield (%) will be back in investor’s attention.
Dividend stocks usually do not get into a free fall and outperform most of the time.
Dividend stocks are easy to get cash flow from your stock investments without liquidating anything. Further, you can use dividends to buy additional units of stock. And, if you reinvest dividends, you can significantly increase your long-term return from your investments because of the power of compounding.