3 Healthcare Stocks That Are Too Cheap to Ignore

Canadians should look to snatch up cheap healthcare stocks like Bausch Health Companies Inc. (TSX:BHC) before the new year.

| More on:
A doctor takes a patient's blood pressure in a clinical office.

Source: Getty Images

The S&P/TSX Composite Index climbed 106 points on Tuesday, December 20. However, the S&P/TSX Capped Health Care Index fell by 2.62%, which was the sharpest loss among the top sectors on the TSX. That is largely due to reeling cannabis stocks that have dragged the index for years. Today, I want to zero in on three healthcare stocks that look cheap in late December. Let’s dive in.

This exciting healthcare stock looks like a strong buy right now

Andlauer Healthcare (TSX:AND) is a Toronto-based supply chain management company that provides a platform of customized third-party logistics (3PL) and specialized transportation solutions for the healthcare sector in Canada and the United States. That means this company offers Canadian investors exposure to the burgeoning healthcare and supply management spaces. Shares of this healthcare stock have dropped 11% in 2022 as of close on December 20. That has pushed the stock into negative territory in the year-over-year period.

This company released its third quarter (Q3) fiscal 2022 results on November 8. It delivered revenue growth of 58% to $164 million. Meanwhile, it posted net income of $19.0 million, or $0.44 per share — up from $12.2 million, or $0.31 per share, in the third quarter of fiscal 2021. Andlauer was bolstered by recent acquisitions in its healthcare logistics and specialized transportation segments.

Shares of this cheap healthcare stock possess a favourable price-to-earnings (P/E) ratio of 19. Moreover, it offers a quarterly dividend of $0.07 per share. That represents a modest 0.5% yield.

Here’s a very promising stock that looks dirt cheap in late December

Bausch Health (TSX:BHC) is another cheap healthcare stock that I’d look to snatch up in the final days of 2022. This Laval-based company that develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter (OTC) products primarily in the therapeutic areas of eye health, gastroenterology, and dermatology. Its shares have plunged 73% in the year-to-date period.

In Q3 2022, Bausch Health saw revenues drop 3% year over year to $2.04 billion. Meanwhile, it posted non-GAAP adjusted net income of $291 million compared to $420 million in the previous year. Bausch reported adjusted net income of $768 million in the first nine months of fiscal 2022 — down from $1.14 billion in the year-to-date period in fiscal 2021.

This healthcare stock last had an attractive P/E ratio of 9.7. It is trading in more favourable value territory compared to its industry peers. I’m looking to pick up Bausch for cheap before the new year.

One more undervalued healthcare stock that also boasts a solid dividend

Medical Facilities (TSX:DR) is the third healthcare stock I’d look to snatch up before we kick off 2023. This Toronto-based company owns and operates specialty surgical hospitals and an ambulatory surgery centre in the United States. Shares of Medical Facilities have declined 12% in 2022. However, the stock is up 2.8% month over month.

The company unveiled its Q3 2022 earnings on November 10. Total revenue and other income grew 3.2% to $102 million. Meanwhile, surgical case volumes rose 3% and facility service revenue posted 6% growth. Shares of this healthcare stock possess a solid P/E ratio of 23, which currently outpaces its industry peers. Better yet, this cheap healthcare stock offers a quarterly dividend of $0.081 per share, which represents a 4% yield.

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 Ambrose O'Callaghan has no position in any stocks mentioned.

More on Investing

A worker gives a business presentation.
Dividend Stocks

TSX Communications in April 2024: The Best Stocks to Buy Right Now

Here are two of the best TSX communication stocks you can buy in April 2024 and hold for years to…

Read more »

Man holding magnifying glass over a document
Tech Stocks

Watching This 1 Key Metric Could Help You Beat the Stock Market

One key metric that Buffett looks at is the return on equity. Here's why you should watch it.

Read more »

Man considering whether to sell or buy
Dividend Stocks

Royal Bank of Canada Stock: Buy, Sell, or Hold?

Royal Bank of Canada (TSX:RY) has a high dividend yield. Should you buy it?

Read more »

oil tank at night
Energy Stocks

Is Suncor a Buy, Sell, or Hold?

Suncor Energy stock is off to a strong start in 2024. Is the TSX energy stock a good buy right…

Read more »

Daffodils in bloom
Tech Stocks

2 Best “Magnificent Seven” Stocks to Buy in April

Two surging mega-cap tech stocks are the best buys among the “Magnificent Seven” this April.

Read more »

A golden egg in a nest
Stocks for Beginners

Got $5,000? 5 Stocks to Buy for Lasting Wealth

Got $5,000 to build a long-term compounding stock portfolio? Here are five top Canadian stocks to building lasting lifetime wealth.

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »