Since the COVID-19 public health crisis began last year, investors have been closely watching healthcare stocks. In the initial stages of the pandemic, the focus was on the prospects for more accurate diagnosis. Now, investors are tracking regulatory approvals for vaccine candidates developed by the pharmaceutical companies…
But, in addition to pharmaceutical companies, other healthcare players, such as medical device sellers, biotech, hospitals and diagnostic service providers, have been strong performers. In the wake of positive news related to the COVID-19 vaccine, hopes are now growing for the development of cures for a variety of diseases, whether chronic or life threatening. In addition, an ageing U.S. population and rising healthcare costs are expected to boost the growth of the overall healthcare sector.
The CMS Office of the Actuary has projected that in the U.S., healthcare will account for 19.4% of GDP in 2027, up from 17.9% in 2017.
But investors that are seeking to benefit from the growth of the sector must look for companies offering a good mix of stability and growth. We think Novartis AG (NVS – Get Rating), Abbott Laboratories (ABT – Get Rating), Merck & Company, Inc (MRK – Get Rating), and Eli Lilly and Company (LLY – Get Rating) are four such companies. They are profitable, have handsome growth prospects and, most importantly, have resilient business models. So, we think it’s wise to buy them now and hold for the long term.
Novartis AG (NVS – Get Rating)
NVS is involved in the research, development, manufacture, and sale of healthcare products worldwide. Innovative Medicines and Sandoz are the two segments through which a company operates.
The FDA recently endorsed Entresto—which already carried an approval for use with patients with chronic heart failure and reduced ejection fraction—for use in heart failure with preserved ejection fraction (HFpEF) for patients whose left ventricular ejection fraction (LVEF) is below normal.
During the fourth quarter, ended December 31, 2020, NVS’s revenue grew 1.6% year-over-year to $12.8 billion. Its EPS for the quarter climbed to $0.92 from $0.50 posted in the prior year period. Its Cosentyx sales for the quarter climbed 13%, while its China net sales climbed 16%.
Analysts expect NVS’ revenue for the quarter ending March 31, 2021 to be $13.1 billion, representing a 6.7% increase year-over-year. Its EPS for the quarter is likely to surge 5.1% to $1.64. NVS ended yesterday’s trading session at $86.50, declining 10.6% over the past year.
NVS’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
NVS also has an A grade for Stability, and a B for Value and Growth. It is ranked #5 of 238 stocks in the Medical – Pharmaceuticals industry.
In total, we rate NVS on eight different levels. Beyond what we’ve stated above, we have also given NVS grades for Momentum, Quality and Sentiment. Get all the NVS ratings here.
Abbott Laboratories (ABT – Get Rating)
ABT is a global pharmaceutical giant involved in research & development, manufacturing and selling of drugs and other health products. While its Established Pharmaceutical Products segment offers drugs for the treatment of various disorders, its Diagnostic Products segment markets laboratory systems.
ABT has received…
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