There is a long list of reasons to consider health stocks, and they don’t all relate to the coronavirus vaccine as you might suspect.
Why Invest in Healthcare Stocks? Easy.
According to the Commonwealth Fund US spends more on healthcare as a share of the economy than any other country – almost twice as much as the average OECD country. Americans use more expensive technologies like MRIs and specialized procedures (like hip replacements) more often than other countries. The Commonwealth Fund also states that the US has one of the highest rates of breast cancer screening in women ages 50 to 69 and the second highest rate of flu vaccinations in those 65 and over.
When you start scanning healthcare stocks, a few common themes emerge: strong balance sheets and cash on mergers and acquisitions, not to mention dividends to fill your pockets. Paving the way for a natural allusion to healthcare stocks is an aging world population, high demand for voting, drug sales, medical equipment, and diagnostic tests.
Sure, big tech and cryptocurrency might get your attention, but why not invest in healthcare in 2022?
3 health stocks to add to your portfolio in 2022
Healthcare stocks can add robustness to your portfolio unlike any other sector to invest in. Take advantage of the unique opportunities that healthcare can offer for a balanced portfolio. Take a look at our three health tips to add to your portfolio in 2022.
Eli Lilly and Company (NYSE: LLY)
Eli Lilly and Company (NYSE: LLY), headquartered in Indianapolis, Indiana, operates on a staggering scale – the company has a mammoth operation with more than 34,000 employees worldwide, approximately 8,000 employees in research and development, clinical research in 55 countries, research and development (R&D) and manufacturing facilities in seven countries and products that are sold in 120 countries.
Its and wide range of treatable diseases and known topical drugs include the following:
- Cardiovascular treatment: ADCIRCA
- Neurodegeneration Treatment: AMYViD
- COVID-19 treatment: bamlanivimab and etesevimab, baricitinib
- Diabetes treatment: BAQSIMI, BASAGLAR, Glucagon Glyxambi, Humalog, Humulin, Insulin Lispro, Jardiance, Jentadueto, Lyumjev, Synjardy, Tradjenta, Trijardy, Trulicity
- Cancer: CYRAMZA, ERBITUX, ALIMTA, Gemzar, Portrazza, Retevmo, Verzenio Krebs
- Bone, muscle, joint treatment: FORTEO
- Endocrine treatment: Humatrope
- Immunology: Olumiant, Taltz
- Pain: EMGALITY, REYVOW
- Neurotreatment: Zyprexa Relprevv
Lilly and Company revenue increased from $ 5.74 billion in the third quarter of 2021 to $ 6.773 billion. Revenue rose 11% in both the third quarter and year-to-date in 2021. Products such as Trulicity, Taltz, Verzenio and Emgality contributed to this growth.
In other exciting announcements, Lilly filed Tirzepatid in type 2 diabetes and an ongoing application for donanemab to the FDA for accelerated approval in early Alzheimer’s disease.
It also received US approvals for new indications for Verzenio and Jardiance, the US and Europe filing of Jardiance for heart failure with preserved ejection fraction (HFpEF), and positive Phase 3 evaluations for lebrikizumab in atopic dermatitis.
UnitedHealth Group Inc. (NYSE: UNH)
UnitedHealth Group Inc. (NYSE: UNH), a healthcare company, has four segments under two business platforms, healthcare services and healthcare services. The four segments include UnitedHealthcare, OptumHealth, OptumInsight and OptumRx.
- UnitedHealthcare: Provides healthcare through the following companies: UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global.
- Optum: Serves payers, care providers, employers, governments, life science companies, and consumers through OptumHealth (care, management, wellness, and more), OptumInsight (data, analysis, research, etc.), and OptumRx (pharmacy care services).
UnitedHealth’s sales rose 11% last year, and that sales growth resulted in a 20% increase in operating income and strong cash flow. UNH stock outperformed the general market by 90%, compared to the S&P 500’s 68% increase since 2017. Premium generation, fees for medical and advisory services, and sales of medical products and services pave the way for an upside investment option in 2022.
Centene Corp. (NYSE: CNC)
In our research on cheap healthcare stocks waiting to rise, Centene Corporation (NYSE: CNC), headquartered in St. Louis, Missouri, caught our attention. As of this writing, Centene’s share price was $ 76.78.
Centene is a multinational healthcare company providing programs and services to underinsured and uninsured individuals in the United States. Centene provides health insurance coverage to individuals through government subsidized programs as well as through its primary and specialist physicians, hospitals, and support services. His health care plans cover the following (wide) spectrum:
- Family and specialist care
- Inpatient and outpatient hospital care
- Emergency and emergency care
- Prenatal care
- Laboratory and x-ray
- Basic domestic care
- Eyesight and dental care
- Therapy and social work
- Care coordination services
The company also provides over-the-counter drugs, medical devices, and abuse / behavioral health services. It also provides a nurse counseling line, as well as after-hours support and services for those eligible for the Military Health System.
Centene Corp.’s Financial Health and Growth Prospect show its potential to outperform the market, including a sales forecast for 2022 that exceeded expectations. The company is exploring strategic alternatives for its international business and expects sales of $ 135.9 billion to $ 137.9 billion in 2022. The stock is up over 25% as healthcare ETFs lag behind. It reported total revenue of $ 32.4 billion for the third quarter of 2021, up 11% from the third quarter of 2020. The company also reported $ 0.99 diluted EPS for the third quarter of 2021, compared to $ 0.97 for the third quarter of 2020.
Immerse yourself in healthcare for extra plus points
While healthcare stocks don’t dominate the market like big tech and cryptocurrencies, big healthcare companies continue to strive to maintain the basics – the quality of life for all people. After all, we cannot live without vaccines, cancer drugs, mental health drugs, and cardiovascular advances. Think again if you think of health stocks as an afterthought addition to your portfolio. They can be a huge boon to your portfolio in the New Year (all of these technologies that are evolving).