The emergence of the Omicron COVID-19 variant contributed to the sharp market pullback in early December. Since then, COVID-19 cases have steadily increased across the developed world. Here in Canada, provinces are already tinkering with heightened restrictions to combat the heavier case load. Moreover, provincial leaders are pushing for the third round of boosters as we approach the winter season. Today, I want to look at two healthcare stocks that are worth targeting in this environment. Let’s jump in.
Here’s a healthcare REIT that could provide protection in this uncertain climate
Northwest Healthcare REIT (TSX:NWH.UN) is a real estate investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. I’d suggested that this REIT could serve as a dependable source of income for retirees in the years ahead. Shares of this healthcare stock have climbed 8% in 2021 as of early afternoon trading on December 16. The stock has dropped marginally in the month-over-month period.
The REIT released its third-quarter 2021 earnings on November 11. Revenue was largely flat in the year-over-year period to $95.6 million. Its international portfolio occupancy held steady at 98.5% in Q3 2021. Meanwhile, total assets under management (AUM) climbed 15% year over year to $8.5 billion. Adjusted funds from operations (AFFO) was reported at $47.2 million — up from $39.9 million in the third quarter of 2021.
Shares of this REIT possess a very attractive price-to-earnings (P/E) ratio of 6.6. Better yet, it offers a monthly distribution of $0.067 per share. That represents a strong 5.9% yield.
One healthcare stock that surged when the pandemic first hit
VieMed Healthcare (TSX:VMD)(NASDAQ:VMD) was a very strong performer in the early months of the pandemic. The company provides in-home durable medical equipment and post-acute respiratory healthcare services to patients in the United States. It played an early role in providing ventilators to healthcare entities. Shares of this healthcare stock have dropped 30% in 2021 at the time of this writing.
The company released its third-quarter 2021 earnings on November 1. VieMed reported total net revenues of $29.3 million in Q3 2021. This included $1.5 million of net revenues for contact and vaccine tracing services and product sales related to the COVID-19 pandemic. VieMed grew its ventilator patient count to 8,200 as of September 20, 2021, compared to 8,103 at the end of the second quarter.
VieMed projects net revenues attributable to its core business between $27.8 million and $28.8 million in the fourth quarter of 2021. The pandemic has pressed on, but VieMed’s COVID-19 response-related business has slowed significantly over the past year. Net revenues from this space have steadily contributed less to VieMed’s total.
Shares of this healthcare stock possess a P/E ratio of 21. That puts VieMed in very solid value territory at the time of this writing. Moreover, the stock slipped into technically oversold levels to kick off December. It has since eased up, but it is not too late to snatch up VieMed on the dip today.