The COVID-19 pandemic crisis is revolutionizing many aspects of society. One industry that is rapidly transforming as a result is healthcare. Provinces and jurisdictions are increasingly recognizing virtual and remote health services as the future of better-quality, more-accessible healthcare. In my opinion, the pandemic is only the beginning of a new wave of growth for digitized, remote healthcare stocks. Below are three TSX stocks that should enjoy massive upside from this trend.
Virtual health is a growth driver for this stock
The first stock that has strong tailwinds from the pandemic is Telus (TSX:T)(NYSE:TU). While Telus is best known as a Canadian telecom, it is quietly becoming a major healthcare technology heavyweight.
In fact, Telus Health is Canada’s largest IT services provider for the healthcare industry. It provides cloud-based Electronic Medical Records (EMR) solutions, personal health applications (like Babylon), and other virtual and tele-health solutions.
So far, Telus has invested over $2.5 billion in digital healthcare innovation. It now has over 85,000 healthcare professionals connected to its network. These investments are playing out at the perfect time. Since the pandemic, the company has seen a large uptick in demand for its virtual/remote health solutions. Being one of the largest players, it has a significant capacity to scale further across the country.
Telus Health only makes up a small portion of the overall company. However, it provides an attractive growth vertical that can complement its stable wireline and wireless businesses. Telus pays an attractive 4.6% dividend. In my opinion, due to its health vertical, it has some of the most compelling growth of the three major Canadian telco stocks.
This company is digitally transforming healthcare
Another stock that will likely thrive out of the pandemic is WELL Health Technologies (TSX:WELL). It operates a portfolio of 19 health clinics in British Colombia and has a digital tele-health network of 1,446 clinics across Canada. WELL is actually the third-largest EMR service provider in Canada. The company’s goal is to revolutionize primary healthcare by providing digitally transformative solutions.
Investors ran into the stock shortly after the March market crash, sending it up over 100%. While this may have been a bit of an overshot, WELL stock still has lots of upside potential. Since the pandemic, it has seen a triple-digit uptick in demand for its VirtualClinic+ tele-health services and EMR digital services.
Although the company is not profitable, it is aggressively investing in acquisitions that broaden its network/virtual service offerings. The company is not cheap here (eight times price to sales), but demand for virtual health options is only going to increase. Since this company is still small, it has a significant opportunity to multiply its operational capacity over the years.
This stock has strong pandemic tailwinds
The last stock that is set for growth out of the pandemic is Viemed (TSX:VMD). It is one of the largest independent providers of in-home respiratory and ventilation services/products in the United States. Considering COVID-19 is primarily a respiratory virus, Viemed’s specialty non-invasive ventilation devices have became even more valuable. Prior to the virus outbreak, the company was doing well, but the pandemic has accelerated demand for its devices.
It is important to mention also that the Centers for Medicare and Medicaid Services (CMS) withdrew its competitive bidding process for non-invasive ventilation services. This was previously a concern overhanging Viemed’s stock.
Now, it can freely work on expanding its relationship as key service partner with hospitals and healthcare providers. Fortunately, it has just implemented a new tele-health application that should be a new attractive offering during the “social-isolation” era.
All around, the pandemic has given Viemed a strong momentum boost. It is a profitable, well-managed business and I think it has many years of growth to come.
Stay hungry. Stay healthy. Stay Foolish.
