Got $4,000? 4 Healthcare Stocks to Buy and Hold Forever

Healthcare stocks will always be a part of the market as essential investments, but these four look like strong long-term holds.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 27, 2025 5:00 pm EST

Healthcare stocks on the TSX have become an increasingly attractive option for long-term investors seeking stability, growth, and even income. This sector thrives on its inherent resilience. Healthcare, being an essential service, remains in demand regardless of economic conditions. With Canada’s aging population and increased investments in healthcare technology, the TSX healthcare sector is poised to deliver consistent returns and opportunities for innovation. Beyond defensive qualities, the healthcare sector also offers investors exposure to growth industries like digital health, long-term care, and biotechnology. This combination of stability and growth makes healthcare stocks a compelling choice for Canadian investors.

doctor uses telehealth — Source: Getty Images

WELL stock

WELL Health Technologies (TSX:WELL) exemplifies the potential of Canadian healthcare innovation. With a market cap of $1.6 billion as of today, WELL has established itself as a leader in digital healthcare solutions. Its recent earnings reflect impressive growth, with trailing 12-month (TTM) revenue of $957.7 million, up 23.1% year-over-year.

The healthcare stock’s focus on integrating technology into healthcare delivery systems has been a major growth driver, earning it a reputation as a long-term disruptor. WELL’s strong financial position, marked by operating cash flow of $126.8 million, ensures that it has the resources to continue expanding and innovating in telehealth and related fields.

Knight Therapeutics

Knight Therapeutics (TSX:GUD) stands out as another exciting healthcare investment on the TSX. With its unique focus on licensing and marketing innovative pharmaceuticals across Canada and Latin America, Knight is well-positioned for sustained growth. Its revenue reached $348.6 million TTM, with a healthy cash reserve of $172.3 million to support ongoing operations and acquisitions.

Despite a temporary dip in quarterly earnings, Knight’s long-term pipeline of 17 products across 11 countries signals robust future potential. The healthcare stock’s focus on underserved markets and specialized therapeutics provides investors with a differentiated healthcare play.

Vitalhub

Vitalhub (TSX:VHI) has captured attention for its leadership in digital transformation within the healthcare industry. The healthcare stock reported a 24.1% year-over-year increase in revenue last quarter, totalling $58.3 million in the TTM. Its solutions address pressing needs in healthcare efficiency, such as patient flow optimization and data-driven decision-making.

With a market cap now exceeding $650 million, Vitalhub has demonstrated its ability to scale effectively. Analysts point to the company’s expanding customer base and software as a service (SaaS) revenue model as indicators of strong long-term growth prospects.

Extendicare

Extendicare (TSX:EXE) Inc. is a cornerstone in the TSX healthcare landscape for its role in long-term care and senior living. As one of Canada’s largest providers of senior care services, Extendicare benefits from demographic trends favouring this industry.

The healthcare stock’s recent earnings highlight its operational stability, with $1.4 billion in TTM revenue and a forward dividend yield of 5.1%, thus making it a great pick for income-focused investors. Its 13.3% quarterly revenue growth year-over-year and strong EBITDA of $99.8 million underscore its ability to generate consistent cash flow even during challenging economic times.

Bottom line

For investors looking to build a portfolio with growth and resilience, WELL Health, Knight Therapeutics, Vitalhub, and Extendicare offer a compelling mix – one filled with digital innovation, essential services, and long-term demographic tailwinds. These healthcare stocks not only provide exposure to defensive industries. They also tap into significant growth opportunities in telehealth, pharmaceuticals, healthcare software, and elder care. The robust financial performances, coupled with promising future outlooks, ensure they remain strong buy-and-hold candidates, especially for Canadian investors seeking to capitalize on healthcare trends. The TSX healthcare sector, enriched by these leaders, offers a rare combination of innovation, income, and long-term stability.