Healthcare is an exceptionally lucrative, yet still taboo subject when it comes to investing. As a service, healthcare is required, much like our need for utilities and groceries. However when it comes to selecting investments that cater to this segment of the economy, we often bypass them and the opportunity that they present.
Here are several health-related stocks that are worthy of mention, and whether they should have a place in your portfolio.
Bausch Health Companies (TSX: BHC)(NYSE: BHC) is no stranger to controversy, and unlike the other companies on this list, is mentioned with more frequency owing to its storied past. Bausch amassed a massive number acquisitions that were financed on cheap loans. The acquisitions were then pushed into the company’s growing distribution network and rates were hiked. This made for a lucrative yet short-lived spike in the share price of the company until concerns over that pricing model and those cheap loans came due.
The result was an epic collapse in share price, a mountain of debt and a broken business model.
Since then, the new and improved Bausch has paid down an impressive amount of debt through restructuring and selling off non-core assets, to emerge a leaner, and possibly profitable company. Bausch even has a more disciplined range of products coming to market that should provide a growing source of revenue that could last upwards of a decade.
Bausch appeals to long-term investors with an appetite for risk. While the company will not rise to its former price point, Bausch is likely to see some growth and return over the next few years.
Sienna Senior Living (TSX: SIA) is an alternative investment option that is lucrative but completely underserved in the marketplace. Canada, like most other developed nations has an aging population. Additionally, as people are working more, having families later and living longer, a growing segment of our population consists of an older generation of parents, uncles and siblings that need temporary assistance such as pre- and post-operative care that can be provided through temporary living arrangements.
As one of the largest senior housing and care provider in the country, Sienna caters to that need through its network of managed residences that provide nearly 12,000 beds across the country. Proof of just how lucrative that opportunity poses to investors comes in the form of Sienna’s occupancy rate, which is well above 90% with each passing quarter, as well as the company’s lucrative monthly dividend that comes in at an impressive yield of 5.45%.
In terms of results, the company’s net income surged 31.7% in the most recent quarter to $40.5 million over the $30.8 million reported in the same quarter last year. Much of that growth was attributed to increases in both Sienna’s Retirement and Long-Term care segments of 4.2% and 3.5%, respectively.
From a growth standpoint, Sienna has completed an incredible $382 million in acquisitions over the course of 2018, including 1,200 new suites spread across both Ontario and British Columbia.
As an investment, Sienna appeals to both income and growth-seeking investors alike.
