It’s been said that what is now called personal computing will soon be called personal intelligence… AI will likely play a meaningful role in crucial parts of life, including our health.
For instance: As we speak, the medical device market exceeds $500 billion globally, and it is projected to reach nearly $800 billion by 2030, attracting significant interest on Wall Street. The World Health Organization (WHO) estimates that approximately 2 million types of medical devices are available today.
These healthcare stocks, in particular, stand to benefit from technological innovations, are safe from market volatility, and pay steady dividends…
Abbott Laboratories (ABT)
A prominent biotechnology company, Abbott Laboratories (ABT), was established in the late 1800s. ABT leverages technology to enhance healthcare outcomes. From eliminating finger pricks for people with diabetes to addressing chronic pain and monitoring vital signs, their focus has yielded success. As one of the nation’s largest healthcare companies, ABT’s sustained growth and longevity make it a compelling and robust opportunity worth watching.
ABT is down slightly year-to-date by 1.14% and has a safe beta score of 0.77. ABT shows TTM revenue of $41.5 billion at $3.29 per share, from which it has made $5.78 billion in net income through its 13.98% profit margin. At ABT’s last earnings call, it reported EPS of $1.03 per share vs. $0.99 per share, as expected by analysts, beating their projections by 4.31%. ABT has an annual dividend yield of 1.88%, a quarterly payout of 51 cents ($2.04/year) per share, and a 58.36% payout ratio. With $6.41 billion in free cash flow and a 10-day average volume of 5.68 million shares, ABT has a median price target of $122, with a high of $136 and a low of $103; this represents a potential upside of over 25% from where it sits currently. ABT has 18 buy ratings and six hold ratings.
CVS Health Corp (CVS)
CVS Health Corp. (CVS) is a household name across the United States, boasting over 9,000 locations as the largest pharmacy chain in the country. Despite facing a decline in the stock market over the past year, this dip is a potential opportunity to invest in one of the nation’s strongest companies. With its established presence and market leadership, considering CVS stock for a potential rebound could be a compelling
move for investors seeking growth in the healthcare sector.
CVS has a very safe 0.53 beta score. It shows TTM revenue of $330 billion—significantly more than its market valuation—at $3.04 per share, making a same-period profit of $3.93 billion via its modest 1.19% net margin. CVS most recently exceeded analysts’ EPS and revenue forecasts, beating them by margins of 5.16% and 5.71%, respectively, while showing year-over-year revenue growth of 10.81%. CVS has a 3.50% annual dividend yield, a quarterly payout of 60 cents ($2.40/year) per share, and a 74.92% payout ratio. With a 10-day average volume of 10.31 million shares, CVS has a median price target of $93, with a high of $143 and a low of $76, indicating the potential for an over 107% price jump. Down by over 25% YTD, this is a great “buy the dip” opportunity. CVS has 20 buy ratings and nine hold ratings.
Medtronic PLC (MDT)
Medtronic (MDT) is another leading global medical device company that operates in diverse areas, such as neuroscience, medical-surgical, cardiovascular, and diabetes care. While facing challenges during the pandemic and slow revenue growth, MDT plans to divest its dialysis, respiratory interventions, and patient monitoring units to focus on high-growth opportunities. MDT sees potential growth in robotic-assisted surgery with its “Hugo RAS” system. Leveraging AI for operational improvements is another avenue MDT explores. These strategic moves and innovative offerings position MDT for long-term potential.
MDT is up year-to-date by 13.57%, has a positive 200-day SMA (simple moving average), and has a safe 0.65 beta score. From its TTM revenue of $31.23 billion at $2.82 per share, MDT profited $3.76 billion in net income on the back of its 12.03% net margin. MDT most recently beat analysts’ projections on EPS and revenue by 1.01% and 3.51%, respectively. MDT has an annual dividend yield of 3.13%, a quarterly payout of 69 cents ($2.76/year) per share, and a generous 96.45% payout ratio. With $4.55 billion in free cash flow and a 10-day average volume of 5.39 million shares, MDT has an average price target of $90, with a high of $104 and a low of $77. This suggests a potential price upside of nearly 18%. MDT has 15 buy ratings and 13 hold ratings.
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