3 Healthcare Stocks That Are Too Cheap to Ignore

After soaring to unimaginable heights, healthcare stocks are down and ripe for the taking for value-seeking investors.

| More on:

As we move past the halfway mark in November 2022 and inch closer to the year’s end, the Canadian stock market continues its roller coaster of a year. As of this writing, the S&P/TSX Composite Index is down by 10% from its 52-week high after an upward trend over the last week.

The Canadian benchmark’s recent movement suggests it might be a good time to allocate some investment capital to assets that can grow your wealth.

The healthcare industry saw a rapid rise amid the pandemic, fueled by the frenzy created by the global health crisis. 2022 has painted a different picture for healthcare stocks. As the world slowly moved into a post-pandemic era, the economic pressure from inflation and rising interest rates began taking a toll on equity markets.

The broader market weakness has presented an opportunity to invest in high-quality healthcare stock at discounted valuations.

Today, I will discuss three such stocks you can consider adding to your portfolio.

A doctor takes a patient's blood pressure in a clinical office.

Source: Getty Images

NorthWest Healthcare Properties REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is a $2.73 billion market capitalization real estate investment trust that primarily engages in the healthcare industry. The trust owns a growing portfolio of diversified, high-quality real estate assets it rents to healthcare organizations.

With a majority of its portfolio focused in Canada and Europe, NWH REIT’s revenue streams are essentially backed by solid tenants with the liquidity to continue generating rental income for the trust.

NWH REIT boasts a 97% occupancy rate and has leases averaging 14.1 years, making its cash flows safe and secure. As of this writing, the REIT trades for $11.31 per unit, down by 21.56%, and boasts a juicy 7.07% yield. It can be an excellent addition to your portfolio at current levels.

WELL Health Technologies

WELL Health Technologies (TSX: WELL) is where the healthcare sector intersects with the tech industry. Tech stocks and healthcare stocks surged amid the stay-at-home orders. WELL Health stock found itself in a unique position to leverage the demand for virtual healthcare services.

Telehealth was already a growing trend, but the pandemic accelerated its adoption, allowing companies like WELL Health to benefit from the boom.

Its growth momentum waned as the first vaccine was approved, and the tech sector meltdown pushed its share prices down further. However, WELL Health Technologies did not do anything as a business to warrant the downturn. It is a solid business and the largest outpatient clinic in the country.

Its growing presence across the border in the U.S. means it has significant growth potential. As of this writing, WELL Health Tech stock trades for $3.13 per share, down by 56% from its 52-week high and too cheap to ignore for your portfolio.

Bausch Health Companies

Bausch Health Companies (TSX: BHC) is the riskiest of the three healthcare stocks but a notable mention to consider. The $3.58 billion market capitalization specialty pharmaceutical company is headquartered in Laval. It develops, manufactures, and markets pharmaceutical products for various health issues.

The company’s been facing issues for several years due to legal disputes but has recently come out of the situation. It has broken off its Bausch & Lomb segment to become a separate company, allowing the company to focus on what lies ahead. The current downturn might continue weighing on the stock, but it could explode to newer heights once things settle down.

As of this writing, BHC stock trades for $9.82 per share. Down by almost 73% from its 52-week high, it is a risky asset to buy but can deliver stellar returns if all works out in its favour in the coming weeks and months.

Foolish takeaway

Remember, not all healthcare-related stocks are a bargain right now. It is essential to conduct your due diligence to find and invest in high-quality companies that are likelier to deliver substantial long-term returns.

NorthWest Healthcare Properties REIT, WELL Health Technologies stock, and Bausch Health Companies stock are three assets that can be ideal additions to your portfolio for this purpose.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

dividend growth for passive income
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy Now and Hold for Decades

This stock is down 15% from the recent highs and now offers an attractive dividend yield.

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

Here’s the 6.8% Dividend Stock I Keep Coming Back To

SmartCentres REIT (TSX:SRU.UN) stands out as a near-7% yield dividend play that's worth coming back to for yield.

Read more »

Child measures his height on wall. He is growing taller.
Dividend Stocks

New to Investing? Start With This Canadian Dividend Stock

This Canadian stock has a proven record of paying dividends and consistently raising their payouts in the years ahead.

Read more »

ETFs can contain investments such as stocks
Dividend Stocks

VFV Isn’t a Complete Portfolio: Here’s What Canadian Investors May Be Missing

VFV feels like a complete portfolio, but it’s really a concentrated bet on U.S. large caps and the U.S. dollar.

Read more »

Partially complete jigsaw puzzle with scattered missing pieces
Dividend Stocks

Don’t Want to Wait a Year for a GIC Payout? This 11.7% Dividend Stock Pays You Monthly

Hamilton Canadian Financials Yield Maximizer ETF (TSX:HMAX) stands out as the ultimate passive-income booster, but it's far different than GICs.

Read more »

dividends grow over time
Dividend Stocks

GIC or Dividend Stock? Here’s Where I’d Put $10,000 for Income and Growth

Rogers can beat a one‑year GIC on income and long-term upside, but only if you can handle volatility and debt…

Read more »

Agricultural harvesting at the last light of day, aerial view.
Dividend Stocks

Potash Power Play: Why This Overlooked Commodity Could Be Canada’s Trump Card

Canada’s potash dominance gives Nutrien a strategic edge as trade tensions rise, making this overlooked commodity worth watching closely.

Read more »

gold prices rise and fall
Dividend Stocks

Trade War 2.0: The TSX Stocks That Could Actually Benefit From U.S. Tariffs

These two TSX stocks could give investors great ways to benefit from Trade War 2.0.

Read more »