3 Undervalued Canadian Healthcare Stocks to Watch in 2023

These three healthcare stocks remain down during this market, making them all great opportunities for those seeking long-term gains.

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Healthcare stocks can be some of the safest investments that Canadians can make — but not all of them. There are a lot of healthcare companies that tend to put all their focus on one product. Should that product become scrutinized, controversial, or simply delayed, then there can be a lot of issues in seeing returns.

That’s why today, I’m going to focus on three Canadian healthcare stocks that provide diversification. So, let’s get right to it.

WELL Health

First up we have WELL Health Technologies (TSX:WELL), which is a telehealth and digital healthcare provider. The company started out providing digital options for healthcare workers in terms of charting, while keeping everything secure.

Since then, WELL Health stock has expanded into becoming the healthcare stock in Canada in terms of telehealth. It’s now the largest outpatient clinic in the country, with more expansion in the United States and Canada all the time. Further, it hasn’t forgotten its roots. WELL Health stock recently announced an artificial intelligence update that will allows clinicians to chart faster, even while using telehealth operations.

Analysts continue to believe WELL Health stock is undervalued, even as shares continue to climb. The stock is up 25% in the last year; however, it did dip recently after missing analyst estimates. Even still, this is a great time to jump in, as the company continues to see record performance.

NorthWest REIT

Another of the newer healthcare stocks is NorthWest Healthcare REIT (TSX:NWH.UN), which invests in healthcare properties specifically. Yet this can still provide a lot of diversification — and does! NorthWest stock focuses on creating a diverse set of property types and in different countries.

This has included taking over an Australian healthcare real estate investment trust (REIT), investments in Norway, the United States, and, of course, Canada. It includes many long-term leases as well, as it mainly invests in larger healthcare facilities such as hospitals.

These lease agreements remain on average 13.9 years long, according to its most recent earnings report. Yet shares are down significantly during all this interest rate turmoil, with expenses rising. NorthWest stock now trades down 43% in the last year, but, in return, you can grab a 10.38% dividend yield.

Sienna Senior Living

Now, to become a bit more focused in terms of real estate, Sienna Senior Living (TSX:SIA) is a solid option as well. This comes from the company’s focus on — you guessed it — senior living. As baby boomers continue to age, there is going to be a major shift towards needing senior care, and lots of it. Furthermore, there’s going to be a necessity to create the option that fits best with the many Canadians in this generation.

Yet right now, Sienna stock is down 18% in the last year, but again offers a substantial dividend yield of 8.28% as of writing. Shares continues to fall thanks to higher interest rates and costs leading to higher prices for potential clients to consider. It’s a hard time to be invested, to be fair.

However, long-term investors should still consider it a great time to buy. Over time, there will be a surge in use as baby boomers enter their 80s. And Sienna stock continues to hold the necessary senior living and long-term-care facilities this group will demand.

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 has positions in NorthWest Healthcare Properties Real Estate Investment Trust and Well Health Technologies. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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