One sector that was flying under the radar prior to COVID-19 was healthcare. However, the pandemic bought the focus back on this recession-proof sector that was also ripe for disruption. The last 18 months have highlighted the importance of investments in healthcare and economic lockdowns brought multiple health-tech companies into the limelight.
The global spending on healthcare is close to eight trillion dollars each year. Now, analysts expect healthcare stocks to grow at a faster pace compared to the overall market which also suggests these companies will benefit from expanding addressable markets.
Here we take a look at 15 Canadian healthcare stocks that should be on the radar of long-term investors.
Andlauer Healthcare Group
The first stock on my list is Andlauer Healthcare Group, a company valued at a market cap of $1.82 billion. It’s an ancillary healthcare firm the provides a platform of customized third-party logistics as well as specialized transportation solutions for companies part of the healthcare space.
The company has seen its revenue grow from $251 million in 2017 to $314.3 million in 2020. Analysts expect sales to touch $414 million in 2021 and $443 million in 2022. It’s also forecast to improve earnings from $0.98 per share in 2020 to $1.39 per share in 2022.
WELL Health Technologies
One of the fastest-growing companies in Canada, WELL Health stock has already returned an astonishing 6,827% in cumulative returns since its IPO in April 2016. WELL Health has expanded its top-line by focusing on highly accretive acquisitions in the past few years.
In fact, the company’s sales have grown from just $414,000 in 2017 to $50.24 million in 2020. Bay Street now expects sales to touch $275 million this year and $431 million in 2022. It shows us that WELL stock is also massively undervalued given its trading at a market cap of $1.55 billion.
CloudMD Software & Services
A company similar to WELL Health, CloudMD Software & Services is a small-cap stock valued at $413 million. Its a SaaS (software-as-a-solution) based entity that provides health technology solutions to medical clinics in North America.
It offers a solution called CloudMD which is a telemedicine platform connecting patients to licensed physicians. CloudMD also provides EMR or electronic medical records solutions to healthcare players and the stock is up 152% since its IPO in June 2020.
Medical Facilities Corp.
Medical Facilities owns and operates specialty surgical hospitals as well as an ambulatory surgery center south of the border. A small-cap stock valued at $297 million, Medical Facilities also provides investors with a tasty dividend yield of 3%. The company pays investors an annual dividend of $0.28 per share and is forecast to report $0.46 per share in earnings this year, indicating the payout is sustainable.
Medical Facilities has grossly underperformed the market and is down 25% since its IPO back in June 2011. However, the stock is trading at an attractive multiple making it a solid bet for income, value, and contrarian investors.
Field Trip Health
Founded in 2008, Field Trip Health is engaged in the development and delivery of psychedelic therapies in North America. It operates health centers that provide psychedelic therapies and generated less than a million dollars in sales in fiscal 2021. Analysts now expect sales to touch $9.22 million in 2022 and $37.55 million in fiscal 2023. The stock has more than doubled since its IPO in October 2020 and is part of a market that touched $4.75 billion in total sales last calendar year.
Field Trip Health has a market cap of $324 million.
Dialogue Health Technologies
A company that operates a digital healthcare and wellness platform in Canada, Dialogue Health Technologies is valued at a market cap of $600 million. Its integrated health platform acts as a hub and provides access to digital healthcare, stress management, and other counseling services.
Dialogue Health has grown sales from $4 million in 2018 to $35 million in 2020. Analysts expect sales to touch $71 million in 2021 and $104 million in 2022. This rapid growth in the top-line will also allow the company to narrow its earnings loss from $1.18 per share in 2021 to $0.14 per share in 2022.
Dentalcorp Holdings
One of the largest companies on the list, Dentalcorp Holdings is valued at a market cap of $2.71 billion. It primarily acquires and partners with dental practices to provide resources, support, and technology to oral care patients. At the end of the quarter ended in June 2021, the company owned a network of 430 dental practices that includes 1,300 dentists, 1,600 hygienists, and over 4,000 auxiliary dental health professionals.
The company was hit amid COVID-19 but its sales are forecast to rise from less than $800 million in 2020 to $1.26 billion in 2021. The stock has gained 10% in market value since its IPO in May 2021.
Greenbrook TMS
This company has a network of outpatient mental health service centers in the U.S. These centers provide transcranial magnetic stimulation therapy which is a non-invasive therapy with FDA clearance. It’s used to treat depression and related disorders. Greenbrook TMS has 128 treatment centers and generated revenue of $43 million in 2020, up from just $13.8 million in 2017. Analysts expect sales to touch $55.5 million in 2021 and $88 million in 2022. Greenbrook TMS stock has declined by 22% since its IPO in October 2018. It’s currently valued at a market cap of $214 million.
Hamilton Thorne
Hamilton Thorne is a company that develops, manufactures, and sells precision instruments, consumables, software, and services for ART or assisted reproductive technologies, research as well as cell biology markets. Its sales have risen from $22 million in 2017 to $40 million last year.
Hamilton Thorne’s stock price has increased by 800% in the last five years but it continues to trade at a reasonable market cap of $268.9 million.
Skylight Health Group
Skylight Health Group is a healthcare services and technology company with operations in Canada, the U.S., the U.K, and Colombia. It operates multi-state primary healthcare networks in the U.S. that include physical practices while providing a range of services.
Skylight Health stock has a market cap of $150 million and is poised for explosive growth. Its sales are forecast to more than triple to $41 million in 2021 and increase by 35% to $55 million in 2022. Analysts also expect the company to narrow its loss per share from $0.45 in 2020 to $0.07 in 2022. The stock has returned 172% to shareholders in cumulative returns since going public in April 2019.
Viemed Healthcare
Viemed Healthcare provides in-home durable medical equipment and post-acute respiratory healthcare services to patients south of the border. Valued at a market cap of $312 million, this company generated $131 million in sales last year, up from just $47 million in 2017. While analysts expect sales to decline by 14% year over year to $112 million in 2021 its forecast to gain pace by increasing 15% in 2022 to almost $130 million.
The pandemic acted as a tailwind for Viemed Healthcare last year and its deceleration in top-line can be attributed to a slowdown in its COVID-19 response-related business. In the third quarter, the company forecasts COVID-19 related sales to range between $0.5 million and $0.8 million. To offset this decline, Viemed is looking to pursue additional sales and support revenue growth. Viemed grew its ventilator patient count to 8,103 in Q2 indicating a sequential growth of 5%.
Analysts tracking the stock have a 12-month average price target of $11.4 for Viemed which is 50% over its current trading price of $7.9.
MCI Onehealth Technologies
MCI Onehealth Technologies provides healthcare services to patients and employees of Canadian corporate customers. These services are provided through a network of 25 clinics as well as via virtual care platforms.
The company sports a market cap of more than $200 million but its sales have fallen from $43.5 million in 2017 to $38.57 million in 2020. The stock went public in January 2021 and is since down by 46%. However, analysts now expect sales to increase by 31% to $50.6 million this year and by 25% to $63.2 million in 2022.
Its quarterly sales in Q2 were up 53% year over year at $11.2 million. MCI Onehealth attributed its stellar growth to a recovery of publicly insured health services as well as a strong performance from corporate health customers.
Corporate customers sales grew 80% to $1.87 million as the company onboarded 500 new accounts in Q2.
Northwest Healthcare
A healthcare-focused real estate investment trust valued at a market cap of $2.76 billion, Northwest Healthcare Properties has returned 29.43% to shareholders since its IPO in May 2010. However, it also provides investors with a healthy yield of 6.1%. After adjusting for dividend payouts, Northwest Healthcare has delivered annual returns of over 9% in the last 11 years.
The REIT allows investors to access a portfolio of 190 high-quality real estate properties with a gross leasable area of 15.4 million square feet in regions including Canada, Europe, Australia, New Zealand, and Brazil. These properties include office buildings, clinics, and hospitals while the company’s long-term indexed leases result in a steady stream of cash flows making its dividend payout sustainable.
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