Seven stocks to explore as demand for healthcare soars

Highlights 

• CVS Health Corporation’s (NYSE: CVS) next ex-dividend date is Oct 21, 2021.

• Global Cord Blood Corporation’s (NYSE: CO) operating income was US$24.2 million in the June quarter of 2021. It added 19,673 new subscribers in the quarter.

• Envista Holdings Corporation’s (NYSE: NVST) P/E ratio is 21.75. The operating income was US$98.5 million for the three months ended July 2, 2021.

Healthcare companies provide various products like medical devices, drugs, therapies, etc., and services like insurance, besides running hospitals and rehabilitation centres. It is a complex and vast sector, but it is currently receiving bigger attention due to the global pandemic.

Here we discuss seven stocks whose price-to-book value is less than 2.0 and generated positive operating margin year-to-date.

CVS Health Corporation (NYSE: CVS) 

The Rhode Island-based company acquired Aetna in 2018. CVS is a pharmacy chain with over 10,000 retail locations. It also processes an average of over 2 billion insurance claims per year.

Its market cap is US$113 billion, and its P/E ratio is 15.75. The forward P/E for one year is 10.88, the annualized dividend is US$2.00, and the dividend yield is 2.4%. Its next ex-dividend date is October 21, 2021, for US$US$0.50 to be paid on November 1, 2021.

For the three months ended June 30, 2021, the revenue was US$72.6 billion, and net income was US$2.78 billion. The cash and equivalents were US$7.12 billion as of June 30, 2021.

The stock closed at US$84.56 with a share volume of 7,284,590 on Oct 14.

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Source - pixabay 

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Global Cord Blood Corporation (NYSE: CO) 

The company provides blood banking services, including processing and storage. The company is based in Hong Kong. Its current market capitalization is US$538 million, and its P/E ratio is 6.92.

For the June quarter of 2021, the revenue was US$48.8 million. The operating income was US$24.2 million, and the net income was US$21.13 million or US$0.17 per share diluted.

The company added 19,673 new subscribers in the first quarter of FY 2022 (June quarter 2021).

The stock closed at US$4.49 on Oct 14 with a share volume of 14,987.

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SunLink Health Systems, Inc. (AMEX: SSY) 

The company provides retail pharmacy services and operates in two segments: healthcare and pharmacy. The Georgia-based company has a market cap of US$17.9 million, and a P/E ratio of 2.63.

The company earned US$10.3 million in revenue and US$4.69 million in net income during the three months ended June 30, 2021. The cash and equivalent were US$9.96 million at the end of June quarter 2021. The SSY stock closed at US$2.59 with a share volume of 31,783 on Oct 14. 

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Bio-Rad Laboratories, Inc. (NYSE: BIO) 

Bio-Rad develops, manufactures, and commercializes life science products. It is based in Hercules, California. Its market capitalization is US$21.4 billion, and the P/E ratio is 5.37, with a forward P/E for one year is 50.71.

For the June quarter of 2021, the company posted revenue of US$715.9 million and a net income of US$914 million. The operating income was US$124.78 million, and cash and equivalents were US$738.4 million at the end of the June quarter of 2021.

BIO stock closed at US$720.11 on Oct 14 with a share volume of 75,044.

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Regional Health Properties, Inc. (AMEX: RHE) 

It is a healthcare real estate investment company and is based in Suwanee, Georgia. The company invests in real estate for healthcare and senior living facility and lease and sublease.

The company has a market capitalization of US$13 million.

For the quarter ended June 2021, the company earned revenue of US$6.47 million and operating income of US$548 thousand. The net loss was US$2.75 million, and cash and cash equivalents were US$5.6 million.

The stock closed at US$7.74 with a share volume of 30,085 on Oct 14. 

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National HealthCare Corporation (AMEX: NHC) 

The Tennessee-based NHC provides long-term nursing facilities, independent and assisted living facilities, and homecare programs.

Its market capitalization is US$1.11 billion and P/E ratio is 6.68. The dividend yield of the company is 2.93%, with an annualized dividend of US$2.08.

Its total revenue was US$263 million, and operating income was US$14 million for the quarter ended June 30, 2021. The net income was US$104.88 million.

The cash and cash equivalents were US$190.8 million.

The stock closed at US$70.78 on Oct 14 with a share volume of 23,863.

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Envista Holdings Corporation (NYSE: NVST)

 It is a dental products company based in Brea, California. It manufactures dental equipment and consumables. The company has a market capitalization of US$6.24 billion. Its P/E ratio is 21.75, and the forward P/E for one year is 19.94.

NVST’s revenue for the three months ended July 2, 2021, was US$740 million, and the net income was US$90 million. The operating income was US$98.5 million, and cash and cash equivalents were US$553.9 million at the end of the quarter.

The stock closed at US$39.09 on Oct 14 with a share volume of 1,263,503.

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Bottomline 

The NYSE Healthcare Index (NYP.ID) gained 10.54% YTD and fell 2.2% in one month. The Healthcare segment of the S&P 500 index was up 0.44% at the close on Friday. Analysts expect a strong performance of the sector in the coming quarters. However, investors should pick stocks only after exercising due diligence.