The healthcare industry was in the limelight during the COVID-19 pandemic due to the high demand for its products and services and the focus on finding a permanent cure. Post the…
pandemic, the increased health consciousness and increasing focus on advanced treatments have been helping the industry perform steadily.
The new-age healthcare industry is boosted by technological developments and innovations that enhance its efficiency and quality of services. According to Statista, the revenue of the healthcare segment is expected to grow at a CAGR of 11.8% to reach $83.42 billion by 2025.
According to the Labor Department, employment in the healthcare sector has enjoyed strong gains. At a time when other industries are laying off the workforce, this sector gained 53,000 jobs in October, boosted by growth in ambulatory healthcare services, as well as nursing and residential care facilities.
The Centers for Medicare & Medicaid Services (CMS) expects healthcare spending in the United States to grow at a CAGR of 5.4% to reach $6.2 trillion in 2028. The rapidly aging population and the upsurge in lifestyle diseases are expected to keep the demand for healthcare strong irrespective of the economic downturn.
Given the sector’s resilience to economic cycles and solid growth prospects, investors could consider buying quality healthcare stock UnitedHealth Group Incorporated (UNH), CVS Health Corporation (CVS), Zoetis Inc. (ZTS), and Teva Pharmaceutical Industries Limited (TEVA).
UnitedHealth Group Incorporated (UNH)
UNH operates as a diversified healthcare company in the United States. It operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx.
Over the last three years, UNH’s dividend payouts have grown at a 16.1% CAGR. Its four-year average dividend yield is 1.4%, and its current dividend translates to a 1.2% yield. It is expected to pay a quarterly dividend of $1.65 per share on December 13, 2022.
UNH’s total assets increased 14.5% to $243.06 billion for the third quarter ended September 30, 2022, compared to $212.21 billion as of December 31, 2021. The company’s total revenues increased 11.8% year-over-year to $80.89 billion.
Adjusted net earnings attributable to UNH common shareholders increased 27.2% year-over-year to $5.49 billion. In addition, its adjusted EPS came in at $5.79, representing a 28.1% increase from the prior-year quarter.
UNH’s EPS and revenue for the quarter ending December 31, 2022, are expected to increase 16% and 11.1% year-over-year to $5.20 and $81.93 billion, respectively. The company has a commendable earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 19.5% to close the last trading session at $553.05.
UNH’s POWR Ratings reflect its solid prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the A-rated Medical – Health Insurance industry, it is ranked #4 out of 11 stocks. The company has a B grade for Growth, Stability, Sentiment, and Quality.
Click here to see the additional ratings of UNH for Value and Momentum.
CVS Health Corporation (CVS)
CVS provides health services in the United States. It operates through three segments: Health Care Benefits, Pharmacy Services, and Retail/LTC.
Over the last three years, CVS’ dividend payouts have grown at a 3.2% CAGR. Its four-year average dividend yield is 2.8%, and its current dividend translates to a 2.2% yield. The company paid a quarterly dividend of $0.55 per share on November 1, 2022.
On September 5….
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