3 Must-Own Healthcare Stocks For Your Portfolio

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The integration of technology into healthcare products and services is paving the way for the disruptive growth of the healthcare industry. With non-emergency services now being rescheduled because of the strong vaccination drive and the gradual economic reopening, companies that manufacture analytical and diagnostic devices and solutions are generating sales growth.

The rapid digital transformation and significant capital investments should facilitate the growth of the diagnostics devices segment. The global medical devices market is expected to grow at a 5.4% CAGR over the next seven years to $657.98 billion by 2028.

Furthermore, healthcare stocks often act as a hedge against inflation, given the relatively inelastic demand for healthcare services. Therefore, we believe that amid rising inflation, popular healthcare stocks Mettler-Toledo International Inc. (MTD), Laboratory Corporation of America Holdings (LH), and Bruker Corporation (BRKR) may be valuable additions to one’s portfolio.

Mettler-Toledo International Inc. (MTD)

MTD manufactures and markets precision, weighing, and analytical instruments for laboratory, industrial, packaging, logistics, and food retailing applications worldwide. The Columbus, Ohio-based company also supplies end-of-line inspection systems used in food production and packaging, pharmaceutical, and other industries. It markets its products through its direct sales force and indirect distribution channels.

On March 24, 2021, MTD completed the acquisition of PendoTECH, a pharmaceutical company that serves biopharmaceutical manufacturers and life science laboratories. This acquisition will expand MTD’s offering to include various sensors and software for measuring, monitoring, and collecting data primarily in bioprocess applications. Combining MTD’s process analytics and PendoTECH’s products and technologies has the potential to create one of the most comprehensive offerings in the market.

MTD’s net sales for its fiscal second quarter, ended June 30, 2021, increased 33.8% year-over-year to $924.35 million. The company’s gross profit came in at $536.90 million, up 34.9% from the year-ago period. Its adjusted operating profit has been reported at $255.26 million, representing a 44.5% increase from the prior-year period.

MTD’s net earnings came in at $184.76 million, representing a 46% year-over-year improvement. Its adjusted EPS increased 53.1% year-over-year to $8.10. The company had 142.25 million in cash and cash equivalents as of June 30, 2021.

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