The healthcare sector is a massive industry with a wide potential for investors.
Healthcare is a basic necessity for people all over the world. Each year, we see new types of mysterious diseases that are often deadly. Such as the coronavirus is one of the broad examples of it. The global pandemic has caused more than 2.3 million deaths, and almost 107 million are facing the virus.
Despite the health concerns, many of the health stocks made big gains. However, healthcare stocks as a whole underperformed the broader market, rising 11% compared to S&P 500 rose 15.9%. Still, the sentiment regarding healthcare stocks is high with the public health concerns. The vaccine is still in a frantic zone and many companies are still researching for more improvement.
In that premise, healthcare is a big market and has massive potential. So, let’s have a look at the three top healthcare stocks to buy this year.
Medtronic (MDT) is an American Irish-domiciled medical device corporation. The company generates most of its sales and profits from the US healthcare market. The healthcare firm with nearly $159 billion market value is a compelling stock for investors. Medtronic is among healthcare firms with safe, stable, and longer-term growth potential.
Talking about Medtronic’s stability, the company is an exclusive member of the S&P dividend aristocrats list. This means that MDT is those dividend stocks that have raised their dividend payments for a consecutive 25 years long period or more. While MDT has an undisputed streak of over 43 years.
Medtronic has shown interest in investing in Compute Health Acquisition Corp., a blank-check company that is expected to go public—with an IPO of $750 million. The company has plans to buy almost 1.5 million units in the offering.
Compute Health has plans to invest in the healthcare sector through the rising computing power and AI technology. This biotech healthcare is set to change the dynamics of the healthcare industry. So, Medtronic’s potential investment could be an effective one in the long-term.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (VRTX) is one of the leading in the healthcare industry. The company’s primary focus remains on the development of drugs that treat the basic cause of cystic fibrosis (CF). CF is a rare genetic disease that causes lung problems and damages other organs, as well.
The company’s most prominent drug, a 3-in-1 pill – Trikafta that obtain approval back in 2019, generated over $3.9 billion in sales for the very first year in 2020. Trikafta is anticipated to drive the company’s revenue for the next few years.
Furthermore, Vertex’s management has indicated acquiring more assets to diversify its portfolio and accelerate its pipeline. VRTX shares are down and are expected to have an upward movement anytime soon. So, it’s one of the stocks to buy with potential upside.
McKesson Corp. (MCK)
McKesson Corp. (MCK) is a pharmaceutical and other healthcare products supplier and distributor. McKesson is more of a logistics firm, still, its involvement in the healthcare sector makes it a promising healthcare firm.
The company recently reported third-quarter FY21 results which came on top with the rise in distribution services. The adjusted gross profit soared over 7% year-over-year, which was mostly driven by an incline in the distribution of COVID-19 tests. Moreover, McKesson’s work assembling ancillary supply kits for COVID-19 vaccines also played a key role in profit growth.
The company distributed over 25 million vaccine doses of Moderna’s COVID-19 vaccine in January. The pharmaceutical distributor expects more contracts to be signed with the U.S. government for the distribution of more vaccines.
With this, the company has upgraded its full-year 2020 outlook and anticipates the adjusted earnings between $16.95 and $17.25 per share. So, McKesson Corp. (MCK) seems a suitable investment option with potential growth opportunity this year.