VMD:CC - After the Pandemic the 1 Healthcare Stock I'm Buying Today
2023-05-01 10:30:00 ET
The severity of the COVID-19 pandemic became apparent in North America in March 2020. That month saw big decision makers in the public and private sphere take unprecedented steps to control the spread of the virus. Moreover, global markets reacted violently, as the pandemic forced mass closures in the private and public sphere. While many equities plunged into the red, there were other stocks that thrived in the face of the most significant global pandemic since the outbreak of the flu in 1918.
Today, I want to zero in on one healthcare stock that thrived during the health crisis and can reward investors even more going forward. Let’s dive in!
What healthcare stocks performed well during the COVID-19 pandemic?
Healthcare stocks do not necessarily behave as defensive investment vehicles during a global pandemic. Bausch Health Companies , the Laval-based company that develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter (OTC) products, saw its momentum dashed in the face of the pandemic. Its shares plunged sharply in late February 2020 and took nearly an entire year to fully recover in 2021.
Northwest Healthcare REIT is a real estate investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. Shares of this REIT also suffered a harsh price dip in February and March of 2020. However, this stock would become more attractive to investors, as the pandemic pressed forward.
VieMed Healthcare ( TSX:VMD ) is the healthcare stock I want to focus on today. This Louisiana-based company provides in-home durable medical equipment (DME) and post-acute respiratory healthcare services to patients in the United States. VieMed stock did suffer a dip in the middle of March 2020. However, it had recovered and posted a 52-week high by the middle of May. Its stock is up 10% month over month as of close on April 28. Shares have climbed 42% so far in 2023. Investors can see more of its recent and past performance by playing with the interactive price chart below.
Here’s why I’m still bullish on this healthcare stock in May 2023
Precedence Research last valued the global medical equipment market at US$35.7 billion in 2021. The report projected that this market would reach US$62.1 billion by 2030. That would represent a compound annual growth rate (CAGR) of 6.3% from 2022 through to the end of the forecast period. Moreover, the COVID-19 pandemic put a spotlight on long-term respiratory illnesses. Spherical Insights valued the global acute respiratory distress syndrome market at US$980 million in 2021. That researcher projected this market would reach $2.13 billion by 2030, representing a CAGR of 7.9%.
This healthcare stock boasts exposure to very promising industries in the space. VieMed Healthcare released its final batch of fiscal 2022 earnings on March 2, 2023. The company posted net revenues of $138 million for the full year — up from $117 million in fiscal 2021. Meanwhile, gross profit rose to $84.6 million compared to $73.4 million in the previous year.
VieMed is in a great spot as Chief Executive Officer Casey Hoyt boasted that “The healthcare market and regulatory environment are stabilizing.” Hoyt went on to say, “…we are at an inflection point of opportunity for both organic and inorganic growth.” That is worth getting excited about.
Should you buy VieMed Healthcare today?
Shares of this healthcare stock are trading in very favourable value territory compared to VieMed’s industry peers. Moreover, the company is on track for strong earnings growth going forward. This is a stock worth snatching up, as it continues its hot streak in the spring of 2023.
The post After the Pandemic, the 1 Healthcare Stock I’m Buying Today appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy .
2023