Investing in healthcare stocks has perhaps never been a better idea. The healthcare sector has grown significantly since the start of 2020, aided in large part by increased medical spending during the COVID-19 pandemic.
Advances in artificial intelligence and semiconductor technology have allowed healthcare companies to build better medical equipment, deliver more accurate results, and expand revenues past previously forecasted growth projections.
How can Canadian investors profit from the immense growth of this essential industry? Below we’ll break down the risks and rewards of healthcare stocks and help you decide if they’re right for your goals.
Related: List of stocks in the Canadian healthcare sector
What are healthcare stocks?
Healthcare stocks are publicly traded companies within the broader market sector of healthcare. The industry is broad and can include:
- Healthcare facilities
- Pharmacies
- Medical device and equipment manufacturers
- Pharmaceutical companies and drugmakers
- Telehealth and telemedicine companies
- Digital platforms and apps designed for healthcare
- Senior living and retirement facilities
- Healthcare REITs
- Health insurance companies
Healthcare is a $300 billion market sector that makes up roughly 12.7% of Canada’s GDP. And though many healthcare facilities in Canada are publicly funded, many more are private tech companies and startups that are merging advances in medical science with developments in technology to create new solutions to common health problems.
Top healthcare stocks in Canada
Many hospitals and medical facilities in Canada aren’t publicly traded companies. But Canadian investors still have plenty of healthcare stocks to choose from. Below are some of the top healthcare stocks in Canada.
Healthcare Stocks | Description |
WELL Health Technologies (TSX: WELL) | Digital healthcare company with the largest chain of outpatient clinics in Canada |
Andlauer Healthcare Group (TSX: AND) | Supply chain management company that specializes in healthcare transportation and logistics |
Chartwell Retirement Residences (TSX: CSH.UN) | Larger owner of senior living facilities in Canada |
WELL Health Technologies
WELL Health Technologies is a young digital healthcare company that owns the largest chain of outpatient medical clinics in Canada. The company’s telehealth services and digital platforms help set it apart from more traditional healthcare providers.
In a nutshell, WELL Health Technologies wants to digitize Canada’s healthcare sector. Their stated goal is to “leverage technology that empowers practitioners and their patients globally.” More specifically, WELL is using telehealth and virtual care to reduce wait times in clinics and ease overburdened facilities that are too often understaffed. This includes providing practitioners with advanced digital platforms that can store Electronic Medical Records (EMR) safely and make billing management easier.
The company focuses heavily on acquisitions. Their strategy is to acquire primary health clinics, digital healthcare companies, and EMR service providers, which can then join their network of growing providers. Right now, WELL digital platforms support over 2,100 healthcare providers, 82 WELL clinics, and 21,000 practitioners, together servicing over 4.6 million annualized patient visits.
Over the past 12 months, WELL Health Technologies Corp. has demonstrated robust financial and stock performance. In the third quarter of 2024, the company achieved record revenue of CAD 251.7 million, marking a 27% increase compared to the same period in 2023. This growth was primarily driven by a 23% organic increase.
WELL Health’s shares have shown significant appreciation. Over the past year, the stock has increased by approximately 42.84%, reflecting investor confidence in the company’s strategic direction and financial health.
Andlauer Healthcare Group
Andlauer Healthcare Group is a supply chain management company that provides an essential (but often overlooked) service: managing the transportation and distribution of medicines, drugs, vaccines, and other healthcare supplies.
The company manages healthcare supply chains in two major ways: through climate-controlled ground and air transportation and its third-party logistics (3PL) systems. Right now, Andlauer operates 9 distribution centers and 18 branches in Canada, and ships healthcare supplies to providers in both Canada and the U.S.
Over the past 12 months, Andlauer Healthcare Group Inc. (AHG) has exhibited stable financial performance. In the fiscal year ending December 31, 2023, the company reported revenue of CAD 648.0 million, marginally down from CAD 648.4 million in 2022. Operating income decreased by 13% to CAD 96.1 million from CAD 110.3 million in the previous year. Net income also saw a decline, totaling CAD 66.1 million compared to CAD 76.3 million in 2022.
AHG’s shares have experienced growth. As of January 28, 2025, the stock is trading at CAD 46.00, with a 52-week range between CAD 36.43 and CAD 48.00. This reflects a positive trend, with the stock price increasing by approximately 26.6% from its 52-week low. These figures indicate that while AHG faced slight declines in revenue and income, its stock performance has remained resilient, suggesting sustained investor confidence.
Chartwell Retirement Residences
Chartwell Retirement Residences offers long-term and senior care facilities across Canada. It’s the largest provider of senior housing, with over 200 retirement and care residencies in British Columbia, Alberta, Quebec, and Ontario.
Chartwell could be an astute long-term investment, as the company is set to profit from Canada’s rapidly aging demographic. Not only that, but the company also dominates the retirement living space in the markets where it operates, with only a handful of smaller companies offering similar services.
Over the past 12 months, Chartwell Retirement Residences (CSH.UN) has demonstrated notable financial performance. In the fiscal year ending December 31, 2023, the company reported revenue of CAD 736.7 million, reflecting a 4.5% increase from CAD 705.1 million in 2022. However, the net loss for 2023 was CAD 60.9 million, a significant decline from the net income of CAD 27.4 million reported in the previous year.
As of January 28, 2025, Chartwell’s shares are trading at CAD 16.20. Over the past year, the stock has experienced a 37.40% increase, indicating strong market performance. This upward trend suggests that despite the net loss reported in 2023, investors remain confident in Chartwell’s long-term prospects.
What are the risks of healthcare stocks?
Healthcare stocks aren’t extremely volatile, meaning we don’t typically associate them with intense price movements, either drastically up or down. But they do have risks that are unique to the healthcare industry.
For one, healthcare companies face heavy regulation from Health Canada. This is especially true for drugmakers and pharmaceutical companies. Often these companies must go through numerous clinical trials before they can release new drugs, and it’s not uncommon for a company to abandon research after failing to secure regulatory approval.
On top of that, there’s also the risk of litigation: consumers can sue the company if health conditions worsen after drugs and medicines are used.
Some of the companies discussed above also have unique risks, mainly because they crossover with other market sectors. WELL Health Technologies, for instance, is a tech company, which makes them vulnerable to investor sentiment in the tech space.
The same can be said about real estate investment trusts (REIT)s that specialize in healthcare: when the real estate industry performs poorly, these stocks can take a hit, even if the healthcare industry is booming.
Are healthcare stocks right for you?
Notwithstanding the risks, healthcare stocks are generally considered defensive or safe stocks. Because healthcare is an essential service, we can expect these companies to generate relatively stable earnings regardless of economic conditions or trends in the stock market.
That doesn’t mean healthcare stocks are immune to price volatility or market downturns. Healthcare companies that crossover with the tech industry (one of the most volatile sectors) will be less stable than, say, senior living facilities.
But given the importance of healthcare in Canada, these companies are safer investments than more aggressive types of stocks.