Personal health and wellness is one of the many secular tailwinds for healthcare companies. Players catalyzing medical advancements have benefited from elevated demand, and their momentum is only rising as the industry has posted a 24.9% gain over the past six months, beating the S&P 500 by 13.3 percentage points.
Although these businesses have produced results, only a handful will thrive over the long term as the influx of venture capital has ushered in a new wave of competition. With that said, here are three healthcare stocks boasting durable advantages.
Natera (NTRA)
Market Cap: $48.53 billion
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Is NTRA a Good Business?
- Average unit sales growth of 19.3% over the past two years reflects steady demand for its products
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 18.2% annually
- Free cash flow turned positive over the last five years, showing the company is at an important crossroads
Natera is trading at $341.65 per share, or 15.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Intuitive Surgical (ISRG)
Market Cap: $131.4 billion
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Will ISRG Outperform?
- Market share has increased this cycle as its 20.7% annual revenue growth over the last two years was exceptional
- Earnings per share grew by 17.4% annually over the last five years and trumped its peers
- Free cash flow margin increased by 7.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Intuitive Surgical’s stock price of $371.13 implies a valuation ratio of 32.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Boston Scientific (BSX)
Market Cap: $72.26 billion
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Does BSX Stand Out?
- Average organic revenue growth of 15.8% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Additional sales over the last five years increased its profitability as the 18.6% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin jumped by 12.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $48.56 per share, Boston Scientific trades at 15.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
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