Healthcare has been ripe for disruption for years. Now, with a global health crisis looming over us all, patients and doctors seem more willing to try innovative new ways to connect. The rise of telehealth is perhaps the biggest story of the year.
With that in mind, here are two Canadian telehealth stocks at the forefront of this revolution.
Telehealth stock 1
Telecommunications giant Telus (TSX:T)(NYSE:TU) has been in the telehealth game since 2007. The company acquired a virtual healthcare platform and rebranded it Telus Health.
Over the years, the company has been slowly building up a user base of patients across the country. Last year, they announced the Babylon mobile app to bolster the platform further. Now, the platform is used by over 26,000 Canadian family doctors to connect with their patients regularly despite the lockdown.
Telus’ position as one of the largest telecom companies in the country magnified the chances of success with this telehealth venture. The company has enough cash to keep reinvesting for growth. If the subsidiary is worth anywhere near as much as its counterparts in the U.S. or the U.K., Telus stock should be worth a lot more.
In short, Telus Health is an overlooked growth engine for a robust dividend stock. The subsidiary helps diversify the company’s sources of income, ultimately making the dividend more reliable.
Telehealth stock 2
Despite the potential, Telus Health will need to deliver jaw-dropping growth to move the needle on the parent company’s valuation. For investors looking to make a pure-play bet, Well Health Technologies (TSX:WELL) is probably the better alternative.
Currently valued at $366 million, the Vancouver-based company has much more room to grow. The team has raised tens of millions in additional funding since the outbreak. Hong Kong billionaire Li Ka-Shing doubled-down on the stock last month by expanding his stake. These funds have been used to launch VirtualClinic+, a comprehensive telehealth platform.
Meanwhile, the team has also partnered with McMaster University for a flu surveillance service and acquired several startups to bolster its platform further. By the end of the year, the team hopes to double the number of clinics it owns in Canada. These aggressive investments could ultimately deliver stunning results for shareholders.
Healthcare technology is, after all, a trillion-dollar global opportunity. If Well Health can capture just a fraction of this nascent market, investors could be in for a windfall.
Bottom line
Telehealth has gained plenty of attention from investors in recent weeks. Of course, the opportunity is vast and relatively untapped. Fortunately, two Canadian companies seem to be at the forefront of this nascent industry.
Telus has been involved for years and has a robust base of subscribers it can tap into right away. While the telehealth initiative diversifies Telus’ income sources, it won’t move the needle much for shareholders in the next few years.
Meanwhile, smaller rival Well Health could be a potential multi-bagger. Investors can probably pick between the two for exposure to the growing demand for virtual healthcare.
