2 Cheap Healthcare Stocks To Consider Buying Right Now

Healthcare Text Screenshot Near Green Fern Leaf

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The healthcare industry has witnessed substantial capital inflows over the past year as the federal government spent liberally to fight the COVID-19 pandemic. This funding has allowed several companies to upgrade their operations with new machinery and equipment purchases and additional personnel.  

As the country recovers from the public health crisis, elective surgeries and the healthcare needs of the growing U.S. elderly population should keep driving the industry’s growth.

Investors’ interest in healthcare stocks is evidenced by the Health Care Select Sector SPDR Fund’s (XLV) 5.4% gains over the past month. But the increasing investor focus has made many healthcare stocks expensive now. As such, we think affordable healthcare stocks Cigna Corporation (CI) and Cardinal Health, Inc. (CAH) could be solid additions to one’s portfolio.

Cigna Corporation (CI)

CI is a health services company that offers medical and dental insurance and related products and services. The company operates through three segments—Evernorth, U.S. Medical, and International Markets.

CI’s revenue increased 9.1% year-over-year to $41.71 billion in the fourth quarter, ended December 31, 2020. The company’s net income came in $4.13 billion, which represents a 323.2% increase from the same period last year. Its EPS was  $11.45, up 340.4% from the year-ago value.

Analysts expect CI’s EPS to increase 9.8% year-over-year to $20.26 for its fiscal year 2021. It surpassed consensus EPS estimates in three of the trailing four quarters. Its revenue is expected to come in at $41.13 billion during the quarter ending June 30,  which represents an 8.9% year-over-year rise.

On April 9, CI and Oscar Health Inc. (OSCR) jointly launched a new health insurance product named Cigna + Oscar, which is designed for small businesses. The product should help small businesses provide their employees with access to affordable, member-first, health insurance products. The stock has gained 40.6% over the past year to close yesterday’s trading session at $259.50.

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