Image Source: Pexels

Demand for healthcare and healthcare insurance is projected to see continuous growth over the coming months, as Americans are further tightening their purse strings against the backdrop of soaring medical bills. 

While policymakers have jacked up interest rates in an attempt to bring down eye-watering inflation, which has shown signs of relief in some market segments, hospital costs are moving in the opposite direction. 

A number of consumers have reported seeing their medical and hospital insurance bills climbing upward since the start of the year. This comes after many of them had already swallowed higher premium prices from early last year. 

While the number of uninsured Americans has fallen significantly since the introduction of the Affordable Healthcare Act (ACA) in 2010, recent projections indicate that the number has steadily started rising again since 2016. More worrisome is the growing population of marginalized groups in the U.S. that remain the most uninsured among American adults. 

Unfortunately, health insurance is non-negotiable in these unpredictable times. This, however, has caused seismic improvements for healthcare providers and some of the industry’s largest medical innovators. 

Better yet, these healthcare companies are expected to benefit from increased investment in technological advancements and growing consumer demand for value-based care services. 

While these companies could see beneficial growth over the coming months and potential years, here’s a look at which of these could provide investors with healthy returns if they are able to play their cards right. 

Medtronic 

Medtronic (NYSE: MDT) is perhaps one of the biggest names in the medical device providers, as the American company is expected to benefit from the growing heart defibrillator market, among other market segments in which it operates. 

This year has already proved to be eventful for the company, seeing stocks gain nearly 13% year-to-date (YTD) on the market. The company, which develops and manufactures healthcare devices and technologies recently released its fiscal year performance and forward-looking guidance, which did see prices slightly retreat in post-earnings trading. 

Nonetheless, analysts are positive about MDT, expecting sales to grow between 4%-4.5% organically. For its fiscal year performance, revenues were up by 5.62%, and currently, MDT sits on a 3.14% dividend yield. For its fourth quarter performance, the company managed to gain an adjusted $1.57 per share, with earnings jumping by 3% and marginally outpacing expectations.

Boston Scientific Corporation 

Boston Scientific Corp (NYSE: BSX) recently snapped a two-day losing streak, as stocks managed to advance by 4.20% in a single day compared to the overall S&P 500 Index SPX gaining 0.08% on the same day.

Boston Scientific is a multinational developer of medical devices and technologies and services in an array of interventional medical specialties among others being vascular surgery, neurovascular intervention, and electrophysiology. 

Elsewhere on the stock market, BSX already climbed 15.87% YTD, and in the last month (May - June), performance is slightly down by 0.69%. Investors would be happy to know that despite BSX being priced at the low $50 mark, it still managed to outperform some of its biggest competitors, including Abbott Laboratories, Medtronic, and Stryker Corporation during recent trading sessions in the second week of June.

Molina Healthcare 

Molina (NYSE: MOH) has continued to ride the wave of increased consumer demand for value-added healthcare services and insurance, boasting a healthy balance sheet, seeing quarter-over-quarter (QoQ) performance for revenue and net income increasing by 5.49% and 24.49%, respectively. 

The Long Beach, California-based healthcare insurance provider has seen stock prices slide from the low $300 per share mark to roughly $275 per share. MOH prices YTD are down by 13.62%, however, pay-to-earnings (P/E) stands at 18.67. 

What might give MOH some major upside in the coming months is that it recently announced that the Indiana Department of Administration is looking to start negotiations with a proposed Indiana healthcare plan. This would allow Molina to provide several parts of the state with risk-based long-term managed services and medical support. 

Cigna Group 

Bloomfield-based Cigna Group (NYSE: CI) is a leading name in the healthcare insurance market segment, which sees the company servicing more than 190 million customers across 30 countries and through several subsidiaries. 

Overall, CI hasn’t performed that well this year, with YTD prices falling by 17.95%, however, the company remains a strong performer among its competitors, and some analysts are positive that its current price rating between $255.50 - $266.01 has made it a “dirt cheap” stock to buy. 

According to recent Zacks Consensus Estimates, stocks currently have earnings pegged at $24.77 per share. This is an increase of 6.5% from last year. Looking towards 2024, the similar Zacks Estimate currently pegs stock earnings at $28.22 per share, marking another 13.9% increase from this year's estimates. 

CVS Health Corporation 

CVS (NYSE: CVS) is not an unknown name in the healthcare and consumer staples segment, with a market capitalization of more than $86.96 billion, the consumer healthcare retailer has some promising prospects in the forward-looking months.

Overall, CVS stock performance isn’t something to get very excited about, at the moment at least. So far, YTD prices are down more than 28%. However, the company did report a 10.81% increase in revenue for Q1 2023. For the same period, CVS enjoyed improved net income performance, clocking in $2.14 billion on its balance sheet. 

Currently, CVS has a dividend yield of 3.63%, and while stock performance might not get investors that interested, CVS continues to be somewhat of a defensive stock pick, as it operates within the consumer segment, providing an array of healthcare and wellness treatment to millions of American consumers. 

Speaking at a recent conference on women’s health and well-being, CVS Health CEO Karen Lynch reiterated the company’s position to further improve and develop more effective healthcare programs for women in America, and look to prioritize their well-being through entrepreneurs, investors, and various stakeholders. 

Final considerations 

While a handful of healthcare stocks might be priced outside of novice investors’ budget, overall, the market segments, encompassing insurance, value-added services, and medical devices are expected to benefit from increased consumer and overall demand. 

Despite the tumultuous economic conditions, from jacked interest rates and stubbornly high inflation, healthcare stocks could help to further be more shock absorbent for investors' portfolios, and award them with healthy returns while broader market conditions remain highly volatile.

More By This Author:

What Happens To Social Security If You Retire Abroad?
How Social Security Benefits Are Calculated: All You Need To Know
EV Battery Stocks Provide Big Potential In 2023; This Is Where Investors Should Place Their Bets