The Motley Fool

3 Healthcare Stocks That Will Keep Your Returns Healthy in 2021

Image source: Getty Images

The healthcare industry was one of a handful of industries that managed to remain stable during this year. As the market crashed, healthcare stocks remained strong as the pandemic continued. Now, with more lockdowns sweeping across Canada, and a new strain of COVID-19 threatening Canadians, healthcare companies are even more important than ever.

The world changed because of the virus, and no industry more than health care. That’s because many saw the necessity of investments in these companies and really everything health care related. Yet when it comes to healthcare stocks that will continue to see investment and growth next year and beyond, I would seriously consider adding CloudMD Software & Services (TSXV:DOC)Northwest Healthcare Properties REIT (TSX:NWH.UN), and Viemed Healthcare (TSX:VMD)(NASDAQ:VMD) to your watch list.


The pandemic meant that investors in CloudMD didn’t have to wait to convince people that this telehealth service was necessary. Now, instead of risking your chances of contracting the virus at a hospital, you can simply ask one of many specialists that CloudMD has to offer. The company has been acquiring everything from mental health organizations to residents, and I doubt very much we’ll return to in-person visits when they aren’t necessary in the future.

The company sported record revenue during its latest earnings report, reaching $3.4 million and now on track for $35 million per year after recent acquisitions. Shares are also up an unbelievable 758%, but still cheap at around $2.60 per share as of writing. So, even a small stake could make you serious returns next year.


If you want stability from your stocks, Northwest is what you’ll want to invest in. The company has properties in every healthcare sector imaginable, from office buildings to hospitals around the world. During Northwest’s latest earnings report, it announced the average lease agreement was a whopping 14.5 years, with 97.2% occupancy. Now that’s stability.

But the stock has also seen strong growth this year, with shares rising 13.45% in the last year, and a compound annual growth rate (CAGR) of 22.5% during the last five years. Meanwhile, investors receive a 6.39% dividend yield that clearly is supported by these long-term lease agreements.


Viemed was a great investment before the pandemic. The company creates equipment for those with respiratory illnesses to be used in the home, and as the baby boomer population continues to age, investors saw this as the perfect option: to take care of their health at home. But since the pandemic, demand has increased again and again. While it’s not likely to continue this streak for years to come, the world will know that Viemed was there when called to action.

Net revenue increased 22% year over year during the latest quarter, with a 58% increased in adjusted EBITDA and an all-time high in cash balance of $32.4 million. Even better, management believes this kind of growth will continue at least into next quarter. Shares are up 26% for this year, but have grown 318% since its initial public offering three years ago.

Bottom line

Health care is likely to continue seeing strong investment in the future. These stocks will continue to see strong returns both during and after the pandemic due to the new necessity of each company. Adding these to your watch list and buying on a dip could be just what you need to keep your portfolio healthy in 2021.

Still worried about cash this year? Motley Fool experts are doubling down on these stocks!

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.

Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS and Viemed Healthcare Inc. The Motley Fool owns shares of and recommends Viemed Healthcare Inc. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.