The health sector has received huge investments from the public and private sectors to meet the challenges related to the pandemic over the past two years. Global health innovation funding totaled record $44 billion in 2021, up 100% year-on-year. In addition, global funding for health innovation has increased 20 times over the past 10 years.
With a growing elderly population, increasing prevalence of chronic diseases, and the emergence of new variants of COVID-19, the demand for quality medical care facilities is expected to increase in the long term. According to the Centers for Medicare and Medicaid Services, national health care spending in the United States is is expected to reach $6.2 trillion by 2028.
Against this backdrop, we believe fundamentally strong healthcare stocks HCA Healthcare, Inc. (HCA), Fresenius SE & Co. KGaA (FSNUY) and Hanger, Inc. (HNGR) could be ideal investment bets now.
Click here to view our 2022 Healthcare Sector Report
HCA Healthcare, Inc. (HCA)
Based in Nashville, TN HCA is a health services company that owns and operates general and acute care hospitals that provide medical and surgical services, emergency services and outpatient services. Additionally, the company operates in two geographically organized groups: Le National; and American bands.
On March 21, HCA offered residency positions to 1,867 medical school graduates to help with physician and nursing shortages facing the nation. With more doctors and nurses, HCA should be well positioned to serve more patients across the country.
In January, HCA announced plans to build five new full-service hospitals in Texas to help meet the state’s growing health care needs. This expansion is expected to significantly increase HCA’s revenue over the long term.
HCA’s revenue increased 5.4% year-over-year to $15.06 billion in the fourth quarter, ended December 31, 2021. Its net profit increased 18.4% from its value a year ago at $2 billion, while its operating income has improved by 76% annually. -over one year to 7.72 billion dollars over the period. Of the society PES rose 39.2% from its value a year ago at $5.75.
The consensus EPS estimate of $4.30 for its fiscal first quarter (ending March 31, 2022) represents a 3.9% year-over-year improvement. The consensus revenue estimate of $14.79 billion for the current quarter represents a 5.9% increase over the same period last year. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the past four quarters.
The stock has gained 41.2% in price over the past year to close last trading session at $260.60.
HCA’s POWR ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. the POWR Rankings evaluate stocks on 118 separate factors, each with its own weighting.
It has a B rating for value, stability, and quality. Among the 13 titles of Medical – Hospitals the industry, it is ranked #1. Click here to see HCA’s additional POWR ratings for Growth, Momentum and Sentiment.
Fresenius SE & Co. KGaA (FSNUY)
FSNUY is a provider of health care products and services based in Bad Homburg vor der Höhe, Germany, for dialysis, hospitals and outpatient medical care. The Company operates through four segments: Fresenius Medical Care; Fresenius Kabi; Fresenius Helios; and Fresenius Vamed.
On March 21, FSNUY agreed to merge its subsidiary Fresenius Health Partners with InterWell Health and Cricket Health to create an independent value-based kidney care provider in the United States. This new company is expected to cure more than 270,000 people with kidney disease by 2025.
On March 14, FSNUY received 510K regulatory clearance from the United States Food and Drug Administration (FDA) for its wireless infusion pump system. Analysts expect the clearance to boost the company’s infusion therapy business going forward.
During its fourth fiscal quarter, ended December 31, 2021, FSNUY’s sales increased 7.1% year-on-year to €9.97 billion ($10.97 billion). Its EBIT (after special items) rose 9.7% from its value a year ago to 1.12 billion euros ($1.24 billion). Its net profit rose 24% from the same period last year to 759 million euros ($835.57 million).
Analysts expect FSNUY’s revenue to grow 2.7% year-over-year to $43.62 billion in its fiscal year 2022 (ending March 2022). Its EPS is expected to rise 2.1% to $0.97 for the current year. The company has an excellent track record of surprise results; it has exceeded consensus EPS estimates in each of the past four quarters.
The stock gained slightly intraday to close yesterday’s trading session at $8.86.
FSNUY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system. FSNUY also has an A rating for value and stability. The title is ranked No. 2 out of 13 titles in the Medical – Hospitals industry.
In addition to the POWR ratings I just outlined, Click here to see FSNUY Ratings for Growth, Momentum, Sentiment and Quality.
Hanger, Inc. (HNGR)
HNGR is a provider of orthotics and prosthetics (O&P) services in the United States. The Austin, Texas-based company operates in two segments: Patient Care: and Products & Services. It also offers therapeutic solutions to patients and companies in acute, post-acute and clinical settings.
In the fourth quarter, ended December 31, 2021, HNGR’s net revenue increased 12.6% year-on-year to $312.37 million. Its adjusted EBITDA rose 4.9% from its value a year ago to $37.22 million, while its adjusted net income rose 12.2% to $15.51 million. The company’s adjusted EPS rose 11.1% from its value a year ago at $0.40.
Analysts expect HNGR’s EPS and revenue to increase 37% and 9%, respectively, year-over-year to $0.37 million and $305.98 million in during its second fiscal quarter, ending June 30, 2022.
Over the past month, the stock price has gained 6.1% to close its last day of trading at $18.38.
HNGR’s POWR ratings reflect a strong outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. It has a B rating for value and stability. It is ranked No. 3 out of 13 stocks within the Medical – Hospitals industry.
To view HNGR’s other ratings for Growth, Momentum, Sentiment and Quality, Click here.
Click here to view our 2022 Healthcare Sector Report
HCA shares were trading at $257.69 per share on Friday afternoon, down $2.91 (-1.12%). Year-to-date, the HCA has gained 0.51%, versus a -4.91% rise in the benchmark S&P 500 over the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the dos and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing stocks. Continued…