HealtWorldwide, people generally have better access to health care than ever before. In the U.S. in particular, the cost of insurance and quality of care are major concerns. However, these fears haven’t stopped people from getting checkups and staying healthy. In fact, demand for medical services is growing every year. In this article we will explore some of the best healthcare stocks to invest in today — as well as tomorrow — and why they’re such great opportunities to add to your portfolio.
McKesson
McKesson is one of the biggest pharmaceutical distributors in the country. The company distributes drugs and medical supplies to hospitals, pharmacies, and other healthcare providers. McKesson is one of the only players in this industry that does both manufacturing and distribution. This gives the company a potential leg up on other companies that solely focus on distribution.McKesson is also looking to capitalize on the growing trend of healthcare companies moving manufacturing to the U.S. This is a result of rising costs overseas and a desire to have more control over the manufacturing process. McKesson just announced a new facility dedicated to manufacturing sterile injectable drugs. This will allow the company to provide a full service to its customers, including manufacturing and distribution.
Surgery Partners
This company is unique in that it operates joint-venture surgery centers. Joint ventures are used by healthcare providers that are unable to buy or build new surgery centers. Patients visiting these centers are typically treated by medical providers under contract with the joint-venture company.This model is attractive because it allows healthcare providers to expand their operations with less investment. The company has been growing rapidly, with adjusted EBITDA growing from $17 million in 2017 to $54 million in 2018.While this joint-venture model is not a sustainable long-term solution, it is a short-term way for healthcare providers to expand their reach and increase patient volume. As the economy continues to grow and more people get health insurance, Surgery Partners will find more customers and be able to transition to a more standard model.
UnitedHealth Group
UnitedHealth Group is one of the biggest health insurance providers in the country, with an expansive portfolio of companies and services. The company’s Optum division is one of the largest medical services companies in the nation. Optum provides pharmacy benefit management, disease management, and HME management services. It also has a significant presence in the population health management space.UnitedHealth Group is also a major player in the prescription drug business, providing pharmacy services to both individuals and health care providers. Lastly, the company just launched a new health insurance product that is less expensive than its current offerings.As the Affordable Care Act continues to be implemented, more and more people will seek health insurance. UnitedHealth Group is well positioned to capitalize on this growing market and expand its client base. The company has nearly $500 billion in assets, so it has a lot of room to grow and its valuation is relatively cheap compared to other providers.
AmerisourceBergen
This company provides a number of different services to participants in the healthcare industry. AmerisourceBergen is one of the largest pharmaceutical distributors in the nation. It also provides logistics and customer care services to health care providers.AmerisourceBergen has a significant presence in all segments of the healthcare industry. It distributes drugs and medical supplies to healthcare providers. It also provides customer care services for pharmacies and other healthcare providers. The company recently acquired MedAssets, one of its top competitors, for $18 billion.AmerisourceBergen is well diversified, providing pharmaceutical distribution and logistics services to customers across multiple industry segments. This will allow the company to withstand disruptions in one industry segment and continue to grow. The company’s stock is relatively cheap and has a low PEG ratio at 0.9, making it a good long-term investment.
Conclusion
Healthcare is a sector that will always be in demand, regardless of economic conditions. Americans visit the doctor more often than people in other countries and have a higher life expectancy. Additionally, the U.S. has a higher infant mortality rate than other developed nations. All of these factors contribute to a growing healthcare industry.The healthcare sector is one of the most regulated industries in the U.S. Companies in this space must operate with a high level of compliance. They are expected to pay their employees a living wage, provide affordable health insurance plans, and comply with a large number of government regulations. This can make it difficult for new players to enter the industry.Investors should be aware that while the healthcare sector is expected to grow in the coming years, it can also be very volatile. There are numerous political factors, including elections and healthcare legislation, that can cause the industry to swing in either direction.
