In the time span of 4 years, the COVID-19 pandemic resulted in huge changes in the US healthcare sector’s structure and its working style. Period of 2020 and 2021 saw numerous challenges for both patients and healthcare service providers. Though there were several difficulties, there continued to be strong momentum of innovation and expansion in healthcare services. Innovation supported the growth prospects of overall sector which led to the introduction of new and innovative technologies and telemedicine expansion. Therefore, global investors continue to track and hunt for best healthcare dividend stocks to buy.
Such significant advancements and innovations support the analysts views of being optimistic regarding the healthcare industry’s future prospects. Global portfolio managers are quite optimistic regarding this situation, and they expect that recent innovations should set the stage for promising outlook in healthcare sector. They believe that healthcare sector is entering the new year with lower valuations after the period of significant underperformance. There has been a surge in innovation, and the effects associated to the post-COVID adjustments continue to slow down. Thus, this can be ideal time to purchase best healthcare dividend stocks.
Recent report by Janus Henderson stated that, in biotech industry, there are several stocks which continue to sell at significant discounts as compared to historical standards. Small and mid-sized biotech companies have seen drops in their values in 2021 and 2022. This decline was seen because long-term growth investments made by the biotech companies were impacted by rise in 10-year Treasury bond yields in 2023.
As per the report, S&P Biotechnology Industry Index, an index solely focused on measuring performance of large bio-tech companies present in S&P 500 Index, continues to trade at ~25% lower value in comparison to the average in previous 30 years. With such valuations, investors should consider investing in the best healthcare dividend stocks and hold till December 2024.
1. Bristol-Myers Squibb Company
The company is engaged in discovering, developing, and marketing drugs for several therapeutic areas, including cardiovascular, cancer, and immune disorders.
It has released its 3Q results, in which the company saw revenues of $11.0 billion, exhibiting a decline of 2%, or 3% if it gets FX adjusted, as a result of lower sales of Revlimid, partially offset by the new product portfolio as well as in-line products. International revenues of the company saw an increase of 2% to $3.3 billion during 3Q. If it gets adjusted for FX impacts, international revenues saw an increase of ~1%, mainly because of Opdivo and its new product portfolio, partially offset by the lower average net selling prices. On a GAAP basis, gross margin saw a decline from 79.0% to 77.1% and, on non-GAAP basis, there was a decline from 79.8% to 77.3% mainly because of product mix and lower hedge settlement gains.
New product portfolio worldwide revenues saw an increase to $928 million in comparison to $553 million in prior-year period, which exhibits a rise of 68%, primarily because of increased demand throughout the portfolio, including Opdualag, Sotyktu, Camzyos, etc. The company has achieved significant regulatory and clinical milestones, which includes important US regulatory approval for Reblozyl in first-line, MDS-associated anemia.
2. Abbott Laboratories
The company manufactures and markets medical devices, adult and pediatric nutritional products, and branded generic drugs.
Sales of $10.1 billion were seen by the company in 3Q23 as a result of strong underlying base business performance. Reported sales of the company saw a decline of ~2.6% because of expected fall in COVID-19 testing-related sales as compared to the prior year. Organic sales growth for underlying base business came in at ~13.8%, exhibiting double-digit growth in each of the 4 major businesses.
3Q GAAP diluted EPS of the company came in at $0.82 and adjusted diluted EPS was $1.14, excluding the specified items.
In September, the company made the acquisition of Bigfoot Biomedical, which furthers its efforts for the development of connected solutions for making diabetes management more precise. It narrowed FY23 EPS guidance range and expects full-year diluted EPS on a GAAP basis in the range of $3.14 – $3.18 and adjusted diluted EPS of $4.42 – $4.46, exhibiting a rise at the midpoint of guidance range. The company projects FY23 organic sales growth, which excludes COVID-19 testing-related sales, to come in low double-digits.
In September, it expanded its existing collaboration with global biotech leader, mAbxience Holdings S.L. This was done to commercialize numerous biosimilar molecules, with aim of broadening access to such therapies for individuals present in emerging markets.
3. HCA Healthcare, Inc.
It is a Nashville-based healthcare provider organization, which continues to operate largest collection of acute-care hospitals in the United States.
The company released its financial and operating results for 3Q ended September 30, 2023. Revenues of the company totalled ~$16.213 billion, net income totalling ~$1.079 billion, or $3.91 per diluted share. Adjusted EBITDA of the company came in at $2.880 billion cash flows from operating activities was $2.479 billion.
During 3Q, most of the aspects of business remained positive, which includes continued strong demand for services, translating into strong growth in revenues. Same facility admissions saw an increase of 3.4%, with same facility equivalent admissions rising ~4.1% in 3Q23 in comparison to the prior-year period.
Over upcoming 5 years, the company’s adjusted EBITDA grew in the range of 4% – 6%, and its diluted EPS growth is expected between 8% – 12%. While the company’s planning for 2024 is yet to be completed, it expects that its 2024 expectations should fall in these ranges.
While above are some of the best healthcare dividend stocks to buy as 2023 comes to an end, there are several companies in the healthcare space which should see strong growth moving forward.
The above-mentioned best healthcare dividend stocks have strong track record of shelling-out dividends to shareholders. Therefore, these are the companies which are resilient in present environment. In 2023 so far, healthcare companies have seen their poorest performance in comparison to the overall market in ~25 years. However, experts believe these stocks are trading at buying levels and a recovery is underway.