2 Health-Related Stocks to Own in Q4 2021 and Beyond

Two top health-related stocks are buying opportunities in Q4 2021 because of their long growth runways.

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The global pandemic brought financial anxiety and heightened health concerns to many. It also triggered a selloff on the stock market in 2020 that investors scampered for safety. However, it opened buying opportunities, especially in the healthcare sector. Jamieson Wellness, a seller of natural health products, soared on the TSX as their sales soared.

NorthWest Healthcare Properties, owner and operator of medical office buildings and hospitals, became popular because it’s the only real estate trust investment (REIT) in the cure sector. If you have an investment appetite, two health-related stocks are attractive options in Q4 2021.

The businesses of WELL Health Technologies (TSX:WELL) and Medical Facilities Corporation (TSX:DR) should do well going forward. Both carry strong buy ratings. Based on market analysts’ forecasts, the upside potential is 75% or more. Likewise, the share prices are less than $10. Buy them now before the anticipated breakouts.

Long growth runway

WELL Health operates primary healthcare facilities and provides digital electronic medical records (EMR) software and telehealth services. Its investing activities focus on the advancement of digital health modernization in Canada.

This $1.4 billion multichannel digital health technology company is growth-oriented in that expansion and acquisitions are ongoing. WELL closed multiple transactions in Q3 and Q4 2021. The company now has a majority stake in Destin Anesthesia, LLC and Pinellas County Anesthesia Associates, LLC.  

WELL bought WISP, a rapidly growing digital health leader that specializes in Women’s health. In June 2021, it became the largest outpatient medical clinic owner-operator following the acquisition of MyHealth. The company expects to close the deal to own Aware MD, Canada’s largest cardiology-specific outpatient EMR.

Regarding financial performance, WELL reported record revenue and adjusted EBITDA in Q2 2021. Their year-over-year growths were 484% and 615%, respectively. Management expects the growth in both to be significant in Q3 2021. Moreover, WELL boasts an active pipeline of acquisition opportunities of clinical and digital assets.  

The current share price is $6.69 and the 12-month average price target of analysts is $11.81, or a 76.5% return potential.

Fast-growing market

Medical Facilities owns a diverse portfolio of high-quality surgical facilities in the United States. It has a market capitalization of $298.93 million and has been operating since 2004. For investors unfamiliar with the company, the business model is unique.

The 17-year-old company operates in a fast-growing sector in the U.S. economy. Physician owners are actively involved in operations, while non-owner physicians can practice at the facilities. The surgeons and specialists in the facilities have a voice in how every facility is run.

Also, the demand for and growth in outpatient procedures are positives for the business. Likewise, the adoption throughout the healthcare system is expansive. Since Medical Facilities operates in alternative surgical facilities, expect further growth.

This healthcare stock trades at $9.33 per share and is among the steady performers, with its 36.16% year-to-date gain. Adding Medical Facilities to your stock portfolio means you can earn two ways: capital gains and income. The company pays a 3% dividend.

Excellent options

WELL Health and Medical Facilities have solid fundamentals and balance sheets to pursue growth opportunities. People need healthcare and are now more aware of maintaining their physical well-being. On the other hand, health-related businesses are excellent options for TSX investors.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends MEDICAL FACILITIES CORP. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

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