The healthcare sector spans multiple frontiers and is one of the biggest and most lucrative sectors for investment in the stock market. These include, but are not limited to, drug manufacturing, healthcare services, IT services to the healthcare industry, and real estate related to healthcare services. However, the shifting regulations and fluctuating demands of different medical services make this a volatile sector to invest in. For example, in 2019, even before the advent of the Covid-19 pandemic, Canadian healthcare spending stood at $265.5 Billion.
With time, there has been a change in the volume and market cap of various stocks. Overall, the healthcare sector has seen growth over the past decades, but the stock pricing of individual companies remains prone to erratic and abrupt fluctuations. These fluctuations stem from strict regulations, litigation risks, and Drug approvals from Health Canada and other regulators. This means that the need for careful market survey and examining future trajectories become ever more critical if you plan to invest in the risky-yet-lucrative healthcare sector.
The Best Medical & Healthcare Stocks for Canadian Investors
We have identified five healthcare stocks with tremendous growth potential, which are a steal if you invest wisely in them.
Viemed Healthcare Inc. (TSX: VMD)
VMD stocks in the Toronto Stock Exchange have a consensus rating of Buy. Founded in 2006, this company has vast experience delivering healthcare products and services to homes. This company specializes in the equipment used to sustain people, predominantly adult patients, with long-standing respiratory problems.
With the advent of Covid-19 and an increase in the demand for medical services, their stock pricing has skyrocketed. As a result, Viemed holds a strong foothold in its particular niche, and its stocks are seen as a safe bet for both long and short-term investors.
Viemed is arguably the biggest home-service provider for patients with respiratory disease. They have had a whopping 44% CAGR (Compound Annual Growth Rate) since 2010.
VMD has earned license and approval in 46 states in the US which promises an overall sustainable growth in sales and revenue.
With the rollout of its new hiring and acquisition plans, coupled with them stepping into the oxygen business, the company seems to be playing its cards right.
The covid-19 pandemic has been a gust of fresh air for the company. As a result, the company reported $27.4 Million in revenue at the end of the second quarter in June 2021, a 13% increase from the revenue of the same quarter in 2020.
The stock price stands at $8.12 as of September 8, 2021, at 18:58 PDT, with the analysts prophesying a median target upward of $10. Due to an ageing population, the new Covid variants and the growing demand for home respiratory equipment in the coming years are expected to keep VMD stocks towards the higher end of the spectrum.
Bausch Health Companies Inc (TSX: BHC)
Bausch Health Companies is a specialty pharmaceutical company that has expanded its horizons and currently deals in consumer health and medical devices. The roots of this Quebec-based company can be traced back to 1959, its inception as ICN Pharma. For five decades, the company has grown and absorbed many competitors and is currently a mammoth in the specialty pharmaceutical sector. However, the reincarnation of Valeant as Bausch Health in 2018 under Joseph Papa’s leadership has been the company’s turning point.
The company has a handful of operating segments, with Bausch+Lomb & International bringing in the lion’s share (55%) of the company’s total revenue.
BHC has been among the most promising buys for the third quarter of 2021, with a prospective breakout and upward mobility of the share pricing. Among the companies in the healthcare sector, analysts are generally optimistic about the future of BHC. It is one of the highly sought-after growth stocks. With $8.47 Billion reported revenue from June 2021, the company is a giant in its sector. A stakeholder analysis of BHC reveals that hedge funds control 12% of the shares. Their influence to move the company towards valuation creation will indirectly benefit the general public ownership.
BHC is one of the long-term investments. With High growth earnings and a gradual increase in revenue, BHC is a safe bet in the longer run.
The company is involved in new ventures with Distill and other big names, indicating BHC’s promising future.
The current trading price of BHC stands at $36.70 as of September 8, 2021, at 19:49 PDT.
WELL Health Technologies Corp Inc
Technology has revolutionized every walk of life, and the healthcare sector has also not been immune to these revolutionary advancements. WELL, Health Technologies is a harbinger of technological innovation and are also involved in acquiring digital assets. Furthermore, as Canada’s largest chain of outpatient medical clinics, WELL has the required scale and expertise to grow even further.
WELL maintains a diverse portfolio, but its expertise is more pronounced in healthcare software development and communication platforms. The company also received the KLAS 2021 Award for Best Patient Outreach.
With a transparent and easy-to-access financial record, WELL healthcare stocks are easy to buy. In 2021 Q2, WELL reported a staggering 484% YoY and 615% growth in adjusted profits. These numbers are a testament to the trajectory of WELL Inc.
The stock pricing of any company heavily relies on its future ventures. WELL has started penetrating deep into the coveted US healthcare market. With the proposed acquisition of WISP, WELL Inc will become a leader in the healthcare technology sector, further welling up the market cap and valuation.
WELL has maintained healthy weekly volatility (5%) over the past year. The Covid pandemic also failed to jitter the rock-stable WELL stocks. As a result, WELL exceeded Canadian healthcare’s overall return of 19.1% and outperformed the market competitors. At the time of writing, WELL is trading at $8.06; the price curve is expected to maintain an upward trend for the next couple of years.
Sernova Corp (TSXV:SVA)
Sernova is one of the forerunners in the regenerative therapeutics medicine industry. Their primary focus is developing regenerative solutions (medical solutions dealing with regenerative or therapeutic cells implanted in patients) to treat chronic diseases like Diabetes and Hemophilia. Currently listed in the TSX Venture, SVA is another safe bet for long-term investments. The company has recorded steady returns, and there are promising prospects for the future because they collaborated with research departments at various institutes like the University of Miami. In addition, any groundbreaking research can haul the stocks to new heights.
Compared to the other giants on the list, Sernova is a market newbie. Still, we have seen the best penny stocks on the TSX Venture skyrocketing their prices, and we think Sernova has that potential despite its humble beginnings.
Sernova has recorded a colossal 386% growth in its stock price in just over a year. This growth, combined with the fact that SVA has a $327 Million market capitalization, should allay any fears about the profitability of SVA stocks. In addition, some analysts had apprehensions about the cash burn situation at Sernova. However, the cash runway situation shows that Sernova is performing way better than expected and will probably continue to do so.
The official press releases from Sernova show that many of their pilot projects are gaining traction and are getting significant funding. At this pace, Sernova’s stock price, which currently stands at $1.29 (September 8, 22:32 PDT), promises some healthy returns.
Moderna Inc (NASDAQ: MRNA)
The covid-vaccine-fame Moderna inc has become a household name since the company became a forerunner in the invention of the vaccine against the deadly pandemic. However, Moderna has been in the market for about 12 years now. MRNA dwarfs all other options on the list, and it is originally from NASDAQ, but we have listed it here because this biotech giant has a bright future for its investors.
Moderna has gobbled up a considerable chunk of the vaccine market, and as the vaccination program expands to other countries, we expect a surge in MRNA pricing. As a result, most Wall Street analysts believe that Moderna is either a strong buy or holds stock at this point. The EPS forecasts for 2021 also stand at a resounding $29.04.
You can judge the magnitude of growth from the fact that MRNA recorded $4.4 Billion in revenues for the quarter at the end of 2021 Q2, a towering figure compared to the modest $66 Million from the respective quarter of 2020.
As the market for booster shots is evolving, Moderna seems to be in a comfortable position with sustained growth and margins growing forward. The current share price for MRNA is $429 and has rallied by about 13% in the first week of September 2021.
Although Moderna’s market competition has been relatively low, the volatility introduced by covid can tip the balance in any direction. Therefore Moderna is an immediate buy, but long-term investments will directly depend on the evolving situation. Nevertheless, as Moderna continues to beat NASDAQ and NYSE, this is the best time to make hay as the sun shines for a Canadian investor.
We have listed the top best healthcare stock for Canadian investors at this point. With these Canadian Healthcare stocks, you will find your investments with healthy returns safe in the long run. Canadian healthcare companies have generally performed well in the face of the most recent pandemic. As the situation improves, the future focus on preventive medicine means the stock pricing for the healthcare space will further swell up.
Healthcare Stocks in Canada
Shares in healthcare and medicine are trading below $5 a share, sorted by the biggest one-day gains. Today we also found that many of the top 10 small-cap stocks on our list have experienced rising price dynamics yearly. So while the overall performance of Canadian small-cap US stocks in the second half of 2019 has been weak, some stand out that are worth watching right now.
One of the healthcare stocks that posted the biggest one-day gains in the past two years is East West Pharmaceutical Services Inc., one of Canada’s largest pharmaceutical companies with a track record in the pharmaceutical industry.
Analysts expect this solid performance to continue through 2021, and it is not surprising that many biotech stocks have performed well against this backdrop. Savaria (TSE: SIS) may not have the flash of companies like Health CloudMD, but the stock is still a good investment for Canadians who should be looking for consistent future returns. Even without a pandemic, the world’s ageing demographics are a good reason to buy Canadian healthcare stocks, especially in the healthcare sector.
Healthcare stocks are one of 11 sectors defined by the Global Industry Classification Standard. Learn more about the top healthcare stocks – Care Penny – that trade on the NYSE, NASDAQ and AMEX. Also, check out our guide to buying and holding your preferred shares for the long term, and look at the best 5G shares available until 2021.
Investing in well-established healthcare stocks can provide a safety cushion in an aggressive growth portfolio. In addition, health stocks are considered defensive stocks because they tend to perform well in bear markets and depreciate less. If you want to add a health stock to your portfolio and make it part of your long-term investment strategy, FSPHX is a wise choice.
Subscribe to our free newsletter to get started with our guide to the best health & pharmaceutical stocks in Canada for 2021 and beyond. This free weekly roundup of our best health stocks from Canada and the US.
We have combined the stocks of about 230 companies to provide an easy way to track the performance of the Canadian economy and stock market, as the S & P TSX Composite Index is widely recognized as the benchmark index for Canada. The Canadian pharmaceutical stocks listed below have been compiled using the TradingView stock screening device. When we looked at the top 10 health stocks in Canada and the US, we found that only eight stocks contained more than 50% of their US counterparts. By comparison, only seven of Canada’s 20 largest healthcare companies were better than their U.S. counterparts.
The S & P TSX Composite Index has a market capitalization of about $2.5 billion, roughly the market capitalization of the U.S. S & P 500. Still, the volatile marijuana ETFs & stocks are more than twice as large as their U.S. counterparts and have an average market capitalization of $1.7 billion.
This is the only Canadian fund in the sector to provide decent cash flow. The fund tracks the NASDAQ Biotechnology Index, composed mainly of companies with a strong track record of successful clinical trials, such as Biogen Inc. (BIIB) and Merck & Co.
About one-third of the fund’s assets are invested in hospital investments, with a further 20% in two areas not found in the Canadian healthcare market: pharmaceuticals and biotechnology. About two-thirds of the funds “assets in this sector are pharmaceutical companies. About a quarter of them are invested in hospital equity, a rare combination of two areas not found in the” Canadian healthcare market, “namely medical technology companies and medical research and development.
If you are Canadian, most banks will have a trading platform to buy all the above stocks. You can invest in health ETFs on Canadian exchanges, but if you’re looking for more options, you should also explore the Canadian exchange and TSX Venture Exchange options.
Determining the valuation of health stocks before buying is important to ensure that you pay a fair price for them. The company’s growth prospects are the most important thing to check for any health stocks you are considering. Although it looks like the opportunity is only a temporary boost, one should expect stocks to take advantage of this opportunity to grow quickly and continue after the pandemic.
Canadian investors looking for profitable stocks in the fight against the COVID-19 pandemic have many options. Investing in small domestic companies carries both increased risk and higher returns, but what is certain is that the diversification and growth potential will provide Canadian investors with diversified growth that is not available locally. Moreover, many of the best stocks to buy in 2021 are tied to the prospects for economic recovery as the world struggles to cope with the global financial crisis.