Digital Healthcare Boom: 2 TSX Stocks Transforming Canadian Medicine

Even though telehealth stocks carry the risk factor of the tech sector and other innovative stocks, the profit margin can be strong enough to make the risk/reward ratio palatable.

| More on:
Biotech stocks

Image source: Getty Images

Is a digital health boom coming? The answer to this question depends upon whether you are looking at the short-term or long-term prospects of this growing industry. Digital health/virtual health is certainly growing as a discipline and is even enjoying regulatory backing as it has the potential to significantly lower the cost of healthcare.

And if you are looking to get in early on this trend, there are two healthcare/tech stocks that you should look into owning.

A healthcare services company

WELL Health (TSX:WELL) is an omni-channel healthcare service provider that assists both patients and healthcare providers in several ways.

The omnichannel platform that the company maintains and the ecosystem of applications it has inspired assist healthcare providers with digital booking (appointments) and e-prescribing. This leads to better patient outcomes, significantly reduced healthcare costs, and ease of healthcare delivery for many patients.

The company is expanding its reach. It’s already the biggest outpatient medical clinic owner-operator in the country and has over 3,900 WELL healthcare providers in Canada and the United States. Its platform supports over 37,000 healthcare providers, and the company has collectively achieved over 6.1 million patient interactions.

WELL Health is a mature digital health company in Canada with a sizable physical footprint. As more healthcare service providers and patients become comfortable with digital health, WELL Health will experience a significant influx of new clients, allowing it to grow organically.

The stock has been rising rapidly since November 2024 and has grown over 57% since then. It might be a brilliant idea to start riding that momentum.

A healthcare-oriented software development company

Vitalhub (TSX:VHI) is a software development company created and run by a team of developers. They focus primarily on health and human services software and cater to various healthcare institutions and providers, including acute and integrated care facilities, specialists, rehab facilities, etc.

The Vitalhub stock has experienced massive growth in the last 12 months — about 180%. Its returns are equally impressive if we start from inception (2015), and it has returned over 980% to its investors since then. However, the recent bull market phase has made the stock relatively overvalued, trading at a price-to-earnings ratio of about 172.

This is high even for a tech stock, so it might be a good idea to wait for this to drop down to a reasonable level before buying this stock for the digital health boom.

Foolish takeaway

The two stocks are already bullish but might experience better traction and offer more sustainable growth as virtual health grows as a mature industry. However, even if your goal is to get in early on the action, it might be a good idea to wait and track the performance of these stocks for a better time to buy.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vitalhub. The Motley Fool has a disclosure policy.

More on Tech Stocks

Safety helmets and gloves hang from a rack on a mining site.
Tech Stocks

Where I’d Invest $300 in the TSX Today

A TSX stock with a leading-edge safety technology is a screaming buy today for its high-growth potential.

Read more »

Map of Canada showing connectivity
Tech Stocks

1 Magnificent Canadian Stock Down 16% to Buy and Hold Forever

This Canadian stock might be one of the best opportunities out there right now while shares are down.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

This AI Stock Could Turbocharge Your TFSA With Substantial Growth Potential by 2030

Down almost 60% from all-time highs, AMD is an AI stock that has significant upside potential. Is the tech stock…

Read more »

a-developer-typing-lines-of-ai-code-while-viewing-multiple-computer-monitors
Tech Stocks

Constellation Software Looks Like a Tremendous Buy Today 

Constellation Software stock, which crossed the $5,000 mark, is trading below $4,500, presenting a compelling buy opportunity.

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Top Canadian Stocks to Buy for Great Growth in 2025

There are some Canadian stocks starting to recover, and these two look like top choices.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

3 Canadian Artificial Intelligence Stocks to Buy and Hold Until 2040

These three Canadian tech stocks to help you benefit from the surging demand for AI tech and infrastructure in the…

Read more »

money goes up and down in balance
Tech Stocks

Billionaires Are Selling Apple Stock and Buying This TSX Stock in Bulk

Billionaires might be dumping Apple stock after it lost over US$600 billion last week. But this other tech stock looks…

Read more »

Data center woman holding laptop
Tech Stocks

Better Tech Stock: Lightspeed Vs. Kinaxis?

These two tech stocks were once on top of the world, but after coming down in price, it might be…

Read more »