Sienna Senior Living, CVS Health and 12 of the Top the Healthcare Stocks to Buy
As baby-boomers retire in large number, the healthcare industry is expected to grow sharply. Retirement homes and long-term care facilities are going to face higher demands. Healthcare is also a more defensive sector for those who are looking for a safer investment choice. It’s also a very diverse field including insurance, medical technology, and care among others. Here are our 12 top picks to take advantage of population trends and healthcare.
Baby-boomers are set to retire in large numbers in the next few years, and among them, 70% of those aged 65 and over will need some long-term care services. Are you ready to deal with the financial stress of long-term care? Here are some tips to better prepare yourself so that you can live stress-free your golden years.
Sienna Senor Living Inc (SIA-T)
They used to be mostly long-term care but is now in short term rentals and they are growing their retirement homes. As the population ages, the demand will grow even stronger. They also have Leisure World product which receives government funding, which gives them some stability.
He recommended this when shares were beaten up during Covid. The government wasn't going to let SIA fail. But he sold all shares around $14, because operating costs (labour) will forever will be higher. It's a tougher business now, though SIA is managed well and demand is huge from the aging population.
Brookdale Senior Living (BKD-N)
They are the largest owner and operator of senior living communities in the U.S.. A very good defensive name. John Stephenson says that any kind of movement up in the housing market or consumer confidence brings a level of increase into the facilities.
(A Top Pick May 6/15. Down 46.75%.) A very good defensive name in general. Probably got tarred with the same brush as healthcare. Still thinks this is a good company, but he left because the price volatility was too hard.
Capital Senior Living (CSU-N)
They operate senior living communities and assisted living centers in the United States. 98% of their facilities are private pay. Their occupancy is close to 90%.
Seniors sucked a lot of people into the sector for a long time because it was a low wage sector. It seemed to all line up well but in actual fact you don’t actually want to move in there. For the last 8 years the interest rates supported them but now you have the theme…
Chartwell Seniors Housing (CSH.UN-T)
This is the largest participant in the Canadian seniors housing sector. They also have a higher level of long term care facilities. The demographics play in their favor. Christine Poole says that the 75-year-plus population is expected to double in the 20 next years, and this would be a good play on that.
It has a lot of liability as seen during the pandemic. The demographics are good with an aging population but their occupancy rate is still below Covid levels. She prefers Savaria because people want to stay in their homes.
CVS Health Corp (CVS-N)
An American retail pharmacy and health care company. A great balance sheet and they pay a good yield. Earnings are improving as they do the right things.
(A Top Pick Feb 15/23, Down 10%) Unique healthcare opportunity with retail pharmacy, health insurer, PBM, primary care network. Vertically integrated healthcare behemoth, cashflow diversification. Trades inexpensively at less than 10x, gushes cash. Free cashflow yield of 10%. Buying back shares. Regulatory reform overhang. Lower-risk healthcare opportunity.
Align Technology Inc (ALGN-Q)
They are a manufacturer in 3D digital scanners and a clear aligners used in orthodontics. This falls into the medical device category, which is a very attractive space. Their technology for braces for teeth appeals to mature individuals who wants something less conspicuous.
Was upgraded today. This was a huge pandemic winner, peaking at $730. Shares are up 70% this year to $373. She bought it way down, nearly doubling her hold in worth. The braces market is huge for teenagers as well as adults. She has recommended this before and still does.
Anthem Inc (ANTM-N)
This is an American health insurance company that is the largest for-profit managed health care company in the Blue Cross and Blue Shield Association. They are also part of Obama Care and Medicaid.
They just rebranded and the ticker is now ELV. About 50% of their business comes from the commercial insurance market, the rest from government contracts. Past recessions didn't really impact their business. They insure about 50 million US citizens. Their major peer is UnitedHealth, but he prefers Athem because its valuation its 5 PE points…
Cigna Corp. (CI-N)
They are an American worldwide health services organization. Seniors over 65 pay three times more on healthcare than those under 65. This company could also benefit from the Affordable Care Act.
(A Top Pick Jul 27/22, Up 8%) Exited, and allocated proceeds to UNH, as it's a better performer, larger scale. He also had concerns over customer concentration. Not expensive at 12x forward earnings plus 1.7% yield.
Humana Inc (HUM-N)
A for-profit American health insurance company that has over 13 million patients.
Affected by upcoming US election concerns. Investors worried new government will limit profits on US drug companies. Generally speaking, better names for investors in healthcare sector. Does not own shares.
Helius Medical Technologies (HSM-T)
A medical technology company that recently received Health Canada approval for a new brain stimulation medical device.They are going through FDA approval in the U.S.. If this gets approved, they will be a billion dollar business.
He has been investing in this for almost three years now. They received Health Canada approval for a new brain stimulation medical device last fall. They are awaiting FDA approval in the US. It magnifies the result of physio-therapy for the brain and the technology is safe. It is a billion dollar business if it…
Johnson & Johnson (JNJ-N)
A well known multinational medical devices, pharmaceutical and consumer packaged goods manufacturing company. It’s a conglomerate of consumer, medical devices and pharma divisions. They’ve recently reported strong earnings. A name you can’t really go wrong with.
They report Tuesday. If they announce any resolution in the talcum powder lawsuits, this stock will jump 10 points.
iShares DJ Medical Devices E.T.F. (IHI-N)
iShares DJ Medical Devices E.T.F. (IHI-N): A well-diversified and global medical and health device E.T.F.. This is a good choice for those wanting to diversify away from big pharma with an overlay of healthcare technology, a growing field.
Allan Tong’s Discover Picks IHI's MER is actually higher (at 0.39%) than the yield it pays (0.3%). Like the other names here, IHI trades at a low beta, 0.86 to be precise. So, if you're not buying this for income, what's the growth? Let's look at IHI's largest holdings. TMO offers diversity among lab testing,…