It took a pandemic a few years ago for healthcare stocks to become more attractive investments for long-term investors who want capital gains, stability, and passive income. Even before COVID, this sector of the economy has always been important. There will always be a strong need for healthcare services.
Investors with a keen eye for good investments look for a strong demand for what underlying companies offer. Canada’s aging population and growing interest in healthcare technology make Canadian healthcare stocks good holdings to consider. The healthcare sector is resilient due to demand, but that’s not the only thing going for it. The industry also offers exposure to innovative technologies that will likely drive substantial growth for years to come.
Today, we’ll look at a few excellent healthcare stocks you can consider adding to your self-directed portfolio for diversified exposure to this sector.
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WELL Health Technologies
WELL Health Technologies (TSX: WELL) came into the limelight during the pandemic when demand for telehealth services skyrocketed. The $1.51 billion market capitalization multichannel digital health tech company is now the largest owner and operator of outpatient health clinics in the country.
Its focus on integrating technology-based healthcare delivery systems into the healthcare landscape made it the disruptor it is today. Despite a return to normalcy in the post-pandemic era, business is good for the company. Its recent earnings reflected the company’s growth. As of this writing, it trades for $6.06 per share and has a $957.69 million 12-month trailing revenue (TTM), up by over 23% year over year.
Extendicare
Extendicare (TSX: EXE) is another foundation in the Canadian stock market when it comes to healthcare stocks. The $909.7 million market capitalization company is a for-profit long-term care provider that offers housing, care, and other related services to seniors. Canada’s aging population increases the demand for its services and offerings, and the trends indicate that business will only continue to get better.
Extendicare stock trades for $10.90 per share. It boasts a massive $1.39 billion TTM, 13.30% year-over-year quarterly revenue growth, and $99.78 million EBITDA growth. It is a company well-positioned to generate significant cash flows even during harsh economic environments.
Vitalhub
Vitalhub (TSX: VHI) is a$625.47 million market capitalization Canadian firm develops tech solutions for health and human service providers across several industry segments, including acute care, social service, home health, community health service, long-term care, and mental health. It is one of the leading Canadian names to bring forth a digital transformation for healthcare.
Vitalhub is growing steadily. As of this writing, it trades for $11.27 per share, up by almost 500% from five years ago. The company reported $58.32 million in TTM and a 24.10% year-over-year growth in quarterly revenue. Its Software as a Service (SaaS) revenue model and growing customer base will likely be key factors in its continuing expansion.
Knight Therapeutics
Knight Therapeutics (TSX: GUD) is a $576.92 million market capitalization specialty and generic drug manufacturing company. The company’s main focus is developing, acquiring, in- and out-licensing, marketing, and distributing innovative consumer health products, medical devices, and pharmaceutical products. Its primary markets are Canada and Latin America.
Its selection of 17 products across 11 countries worldwide and its focus on specialized therapeutics set the company up for a strong future in the industry by creating its own niche. The company’s recent financials showed it reported a $348.64 million TTM and a 13.20% year-over-year quarterly revenue growth. As of this writing, it trades for $5.70 per share.
Foolish takeaway
Foolish investors who want to add exposure to the healthcare sector with a healthy mixture of stability and growth should consider adding these four stocks to their holdings. These healthcare stocks provide opportunities to capitalize on the resilience of the industry alongside significant long-term growth opportunities.
