Healthcare Sector In 2021: The Complete Investors Guide

Amgen Inc. (AMGN - Get Rating)

AMGN is a biotechnology-based human therapeutics leader with historical expertise in renal disease and cancer supportive care products. Its flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. AMGN’s five key products are among the top-selling drugs in the world.

While the company hasn’t had a recent blockbuster since Prolia/Xgeva in 2010, cholesterol drug Repatha and migraine drug Aimovig are setting the firm up for strong growth in the years ahead. Plus, immunology drug Otezla is poised to be a top product by the end of the decade. The company has been working on growing its own biosimilar business, which will be a critical growth catalyst over the long-term.

AMGN has a Buy rating and a grade of B in our POWR Ratings system. It also has a Value Grade of B, as it continues to trade below its intrinsic value. The company has an EV/EBITDA of 12.6, well below the industry average. Plus, its forward P/E of 13.61 is also low. AMGN also has a Quality Grade of A due to its rock-solid balance sheet. As of December, the company had $10.6 billion in cash, compared with only $91 million in short-term debt.

We also grade AMGN based on Growth, Momentum, Stability, and Sentiment, which you can find here. AMGN is ranked #14 in the Biotech industry. For other top Biotech stocks, click here.

Medtronic (MDT - Get Rating)

One of the largest medical device companies, MDT develops and manufactures therapeutic medical devices for chronic diseases. Its portfolio includes pacemakers, defibrillators, heart valves, stents, insulin pumps, spinal fixation devices, and surgical tools. The company markets its products to healthcare institutions and physicians in the United States and overseas.

The company essentially has exposure to all major medical tech markets with a robust pipeline of new product launches. Its leadless pacemaker is seeing strong demand, and this should continue due to the Micra AV product, which expands the potential patient market. While the pandemic did affect the company, MDT weathered COVID relatively well and should bounce back considerably as elective procedures ramp up. Plus, the company is a market leader in core heart devices, spinal products, insulin pumps, and neuromodulators for chronic pain.

MDT has an overall rating of B or a Buy rating in our POWR Ratings system. The company also has a Growth Grade of B, which isn’t surprising as revenue is expected to rise 35.7% in the current quarter. Earnings are also expected to rise a whopping 144.8%. MDT also has a Sentiment Grade of B as most analysts rate the stock a Strong Buy or Buy.

CI shares were unchanged in after-hours trading Thursday. Year-to-date, CI has gained 17.62%, versus a 4.71% rise in the benchmark S&P 500 index during the same period.

For MDT’s Value, Momentum, Stability, and Quality grades click here. The company is also ranked #41 in the Medical – Devices & Equipment industry. For more top stocks in that industry, click here.


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