If investors needed a reminder that the healthcare industry will always play a critical role in financial markets, 2020 provided just that. As the global pandemic derailed the world’s economy and caused the biggest health crisis of our lifetimes, these companies helped to restore confidence and provide hope. Whether it’s businesses developing vaccines or technology-driven companies that help patients receive the care that they need during this trying time, it’s clear that there are plenty of great opportunities in the sector for investors to explore.
This year should continue to reward investors that put their faith in quality healthcare stocks. These are companies that have an opportunity to change the world and improve the quality of life for millions of people. Keep reading on for an overview of 3 healthcare stocks set to soar in 2021.
Teladoc Health (NYSE:TDOC)
With so many people forced to stay at home throughout the pandemic, the ability to deal with health issues virtually became a true necessity. Telemedicine is here to stay, and that’s what makes a company like Teladoc Health such a compelling option. It’s a leading telehealth company that provides virtual healthcare services via its various consumer brands. The company helps people deal with issues ranging from the flu to complicated medical conditions like congestive heart failure via its platforms. We are witnessing a shift in how people receive healthcare, and that trend should continue long after the pandemic is under control.
With Teladoc’s large global infrastructure of 50,000 credentialed providers, patients can link up with the doctors they need within 10 minutes. It can help patients get the care they need cost-effectively and assist employers and payers with the analytics they need to reduce their costs as well. Recent acquisitions including InTouch and Livongo should be viewed as a statement of intent. Teladoc continues to make strategic moves that should help it become the dominant company in telehealth for years to come. In Q3, the company reported a 109% year-over-year revenue increase and has seen total visits increase 163% to 7.6 million for the nine months ended September 30, 2020.
Vertex Pharmaceuticals (NASDAQ:VRTX)
There aren’t many healthcare stocks out there that offer the same upside as a company like Vertex Pharmaceuticals does at this time. It’s a major biotechnology company that develops and commercializes therapies for serious diseases that impact people around the world. Investors should be attracted to the fact that Vertex completely dominates the market for cystic fibrosis treatments. Cystic fibrosis is a life-shortening genetic disease that affects roughly 75,000 people around the world and eventually leads to symptoms like chronic lung infections and damage without treatment. Part of the risk with biotech companies is that a competing company can create a drug candidate that renders certain products obsolete, which makes the fact that Vertex expects to maintain market leadership until at least the late 2030s a strong selling point.
The company can use its cash flows from its existing treatments to develop other drugs in its pipeline, which includes promising areas like sickle cell disease and AAT deficiency. In Q3, Vertex reported product revenues of $1.54 billion, which accounted for a year-over-year increase of 62%. Vertex also has a strong balance sheet with $6.2 billion in cash & cash equivalents as of Q3 that could lead to M&A activity in 2021. If you are interested in a biotech company that is saving lives, possesses a blockbuster drug, and faces minimal competition at this time, look no further than Vertex Pharmaceuticals.
Abbott Laboratories (NYSE:ABT)
The last healthcare stock on our list is Abbott Laboratories, a diversified health care products company with a strong financial position. Four main segments make up Abbott’s business, which includes established pharmaceutical products, diagnostic products, nutritional products, and medical devices. Abbott is the market leader for many of the products it provides and has a strong track record of making strategic acquisitions over the years, which are two great qualities to look for in a healthcare stock.
We know that Abbott will continue to see heavy demand in 2021 for its medical diagnostic products that help to control the spread of COVID-19 and assist with the development of treatments for the virus. However, there’s more to this company than COVID-19 testing, and Abbott’s FreeStyle Libre glucose monitoring system could be a strong growth driver this year. The stock offers investors a dividend yield of 1.62% and it’s also worth noting that Abbott’s management raised its full-year guidance after posting strong Q3 earnings results.
Before you consider Teladoc Health, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Teladoc Health wasn't on the list.
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