While healthcare stocks had some momentum in the equity market, the sector has grown substantially since 2020, largely due to the impact of a global health crisis. With increased spending and the use of more advanced technology, the sector has expanded, driving more revenues for healthcare companies.
The sector accounts for roughly 12.7% of the country’s gross domestic product. Investors interested in benefitting from the industry’s rise can buy shares of healthcare stocks.
Any publicly traded company dealing with healthcare stands to deliver increased shareholder value as the industry continues to expand. Today, we will look closely at two healthcare stocks that you can consider adding to your self-directed portfolio for this purpose.
A healthcare tech stock
WELL Health Technologies (TSX: WELL) is a $929.01 million market capitalization digital health company headquartered in Vancouver. Bringing technology and healthcare together, WELL Health saw a meteoric rise due to stay-at-home orders increasing the demand for telehealth services. Since its initial rise, it has become one of the largest operators of outpatient clinics in the country.
With its recent acquisition of HEALWELL AI’s clinical assets, the company is further integrating advanced technology to establish an even stronger footing in the industry. While the tech industry has been under pressure due to the sticky inflation situation, the company has healthy growth prospects.
As of this writing, WELL Health stock trades for $3.91 per share. Down by 34.17% from its 52-week high, it might be a good price point to scoop up its shares for a bargain.
A healthcare real estate stock
NorthWest Healthcare Properties REIT (TSX:NWH.UN) is the only real estate investment trust (REIT) operating in the healthcare industry. The $1.01 billion market capitalization REIT owns and manages a diversified portfolio of properties in the healthcare industry, from hospitals to office buildings.
With most of its revenue coming from tenants backed by governments, the REIT consistently boasts excellent occupation and rent collection rates.
So far in 2023, NorthWest Healthcare Properties REIT has underperformed. As of this writing, it trades for $4.15 per share, down by a massive 61.21% year to date. Due to the substantial decline in share prices, its dividend yield has become inflated to a juicy 18.39%. While concerning, its 96% occupancy rate and weighted average lease expiry of 13.5 years is a reassuring fact for its investors.
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Foolish takeaway
WELL Health Technologies and NorthWest Healthcare Properties REIT are two major players in the healthcare industry, with each focused on a different aspect of it. If you are interested in exposure to the tech sector, WELL Health stock can be a better pick. That said, the stock is prone to the impact of market volatility on the tech industry.
NorthWest Healthcare Properties REIT might make for a better pick if high-yielding monthly dividend income and a lower degree of risk for long-term capital gains align with your investment goals.
