Buy Alert: 3 Healthcare Stocks Nearing Super Attractive Entry Points

As a prolific cog in the economic machine, the healthcare industry has been a roller coaster ride over the past few years. With the global pandemic, economic slowdown and industry-wide disruptions in play, healthcare stocks took a major hit but are now demonstrating signs of recovery.

However, the industry has proven its resilience, effectively weathering multiple challenges and starting to emerge on the other side. The macroeconomic landscape is stabilizing, creating a mighty attractive entry point for those looking to buy healthcare stocks. With the easing of profit pressures, these robust stocks are pushing ahead for a favorable long-haul journey.

Though headwinds such as rising interest rates and fierce competition pose risks to profitability and the industry’s growth trajectory, innovative drug developments and reliable stability during economic downturns present a more optimistic view. To sum up, despite the near-term challenges, the sector’s long-term growth potential is undeniable, painting a balanced outlook for healthcare stocks.

Charles River Laboratories (CRL)

Charles River Laboratories (NYSE:CRL) is a prominent name in the healthcare sphere and is renowned for providing various lab tools and services critical for developing pharmaceutical drugs. As one of the leading contract research organizations, it undertakes laboratory work for diverse companies and has become a key player in the realm of drug research and development.

On top of that, the firm has designed software and services assisting biotech firms in building drugs and organizing clinical trials. This technological edge makes it a spectacular choice for investors looking to load up on reasonably priced stocks.

However, Charles River recently faced hurdles, having been scrutinized by the government for procuring illegally-sourced monkeys from Cambodia. Consequently, the stock is trading at a major bargain to its historical price metrics and with the sector median.

Nevertheless, the company’s impact on the drug development industry is undeniable. Between 2020 and 2022, over 80% of all FDA-approved drugs benefitted from Charles River’s research services.

Medtronic (MDT)

Medtronic (NYSE:MDT) is a trailblazer in the realm of medical devices and therapies, holding a special place in medical history for developing the pacemaker. As a result, it has proven to be a compelling choice for those searching for exceptional income stocks. Generating over $31.5 billion in annual sales and stellar profitability, Medtronic consistently provides its investors with a satisfactory return on investment.

Looking forward to the upcoming fiscal year, Medtronic projects an organic revenue growth between 4.0% and 4.5%. Moreover, when it comes to dividends, Medtronic shows its generosity by offering a substantial $2.76 per share, backed by robust profits and cash flows. After posting its fiscal fourth-quarter earnings report in May, Medtronic displayed further confidence by increasing its annual dividend by 1.5%.

Adding to the excitement, MDT stock offers an attractive 3.2% dividend yield, while analysts from TipRanks foresee an 14.28% upside from the current levels.

Danaher Corp. (DHR)

Danaher Corp. (NYSE:DHR) a top producer of sophisticated life-saving medical devices, recently outperformed Wall Street predictions in its second-quarter earnings report. The firm declared earnings per share of $2.05, surpassing estimates by five cents. Danaher’s second-quarter revenue reached $7.16 billion, exceeding the Wall Street prediction by 0.7%.

Traditionally, Danaher has operated in diverse sectors, exhibiting a consistent pattern of mergers and acquisitions. The firm is now gearing up for the next stage in its extraordinary growth journey. It has effectively divested or spun off its non-core businesses, allowing it to concentrate on its more profitable divisions, including life sciences, particularly lab tools and equipment.

Though it was the fourth consecutive quarter where Danaher surpassed Street forecasts, its stock went on a post-earnings dip. This was due to weaker-than-anticipated free cash flow, with second-quarter free cash flow totaling $1.59 billion, falling short of consensus forecasts by 8%.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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