Are you looking for a bargain? Today, we have just that with one dividend stock and one growth stock on board for investors. These two bargain stocks are perfect for long-term investors looking for sweet passive income. Let’s get into it.
Extendicare
First up, we have Extendicare (TSX:EXE), which is perfect for those seeking value in healthcare. This senior care provider offers a unique blend of solid financial performance, attractive dividend yield, and a promising outlook that makes it an enticing option for both income-focused and value investors.
Extendicare has demonstrated resilience and growth through its financial results. The company’s upcoming second-quarter results, set to be released on August 12, 2024, are highly anticipated following a strong first quarter where earnings per share (EPS) significantly exceeded expectations. In the first quarter (Q1) of 2024, Extendicare reported an EPS of $0.14, compared to $0.045 in the same quarter of the previous year, highlighting its operational efficiency and revenue growth.
Extendicare’s market position as a leading provider of senior care services in Canada offers significant growth potential. The company operates a network of 123 long-term-care homes and provides home healthcare services, which are in increasing demand due to Canada’s aging population. Additionally, Extendicare’s involvement in group purchasing services further diversifies its revenue streams and strengthens its market presence.
One of Extendicare’s most compelling features is its robust dividend yield. The company consistently declares a monthly dividend of $0.48 per share, translating to an annual yield of approximately 6.55% as of writing. This high yield places Extendicare among the top dividend payers on the TSX, providing a steady stream of income for shareholders. While the payout ratio is high, the company’s stable cash flow from its diversified services helps sustain this dividend.
WELL Health
Next up, we have WELL Health Technologies (TSX:WELL). The company has recently demonstrated significant growth and robust financial performance, making it a compelling investment opportunity for those looking to capitalize on the burgeoning digital healthcare sector.
WELL Health reported record revenues and net income for the first quarter of 2024, achieving $231.6 million in revenue, a 37% increase from Q1-2023. This growth was driven by both acquisitions and a notable 13% organic growth. The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Q1-2024 reached $28.3 million, up 6% from the same period last year, indicating strong operational efficiency and profitability.
WELL Health’s patient visit metrics have shown impressive growth. The company recorded 1.3 million patient visits in Q1-2024, a 34% increase year over year. This includes significant increases in both Canadian (45%) and US (23%) patient visits. Total care interactions also saw a 43% increase year over year, emphasizing WELL Health’s expanding reach and service utilization.
Plus, the company’s growth has been fuelled by strategic acquisitions and expansions. For example, the company recently acquired Proack Security, enhancing its cybersecurity capabilities within the healthcare sector. Additionally, the expansion of its OceanMD subsidiary, which now includes over 4,700 clinics and hospitals across Canada, highlights its growing footprint in the healthcare technology space.
Despite its robust financial performance and growth prospects, WELL Health remains attractively priced. The stock is considered undervalued, given its earnings potential and the significant expansion of its healthcare services and technology solutions. Analysts have noted that WELL Health’s current valuation does not fully reflect its future earnings potential, making it a bargain stock for investors looking to gain exposure to the healthcare technology sector.
Bottom line
Despite both of these companies performing well, both remain undervalued on the TSX today. So, don’t wait! These healthcare stocks offer surging opportunities. Make sure to get in while it lasts.
