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3 Hospital Stocks That Outperformed the S&P Index Year to Date
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After bearing the brunt of the COVID-19 pandemic, the hospital industry is bouncing back on higher admissions, emergency room visits, value-based care models and its cost-curbing measures.
The said industry has been hard hit by the coronavirus outbreak last year because it had to suspend non-emergency procedures. Moreover, hospitals had to incur huge amounts of costs to treat COVID-19-infected patients. However, things are gradually on the upswing for the industry owing to recovery in revenues. Other factors, such as widespread vaccination programs, constant acquisitions and mergers, and steady technological advancements also aided the industry.
The rapid adoption of technology also enabled companies cater to telehealth requirements. Given the current situation, demand for virtual health services is expected to stay. The hospital industry is booming at the moment and is constantly driving innovation in healthcare services and products. The industry players are also constantly forging alliances to penetrate geographies and meet demands of the market.
Further Upside Left?
We believe that the future prospects of the hospital industry are bright despite several challenges stemming from the COVID-19 pandemic.
The overall bullish scenario makes us optimistic about its consistent growth, which should boost prospects of the participating companies with sound business fundamentals.
Here are some of the factors that will positively impact the companies.
Pursuing Mergers & Acquisitions Strategy: Hospitals continue to intensify focus on M&A strategy, which added facilities and beds to their network, boosted business scale and expanded their geographical presence. These initiatives led to an improved quality of care and brought about diversification benefits, crucial for strengthening a stock’s market position.
The M&A deals, however, suffered a setback from the pandemic-induced volatilities and several such deals were put on hold. Nevertheless, extensive vaccinations and a gradual revival of the global economy will increase the companies’ spending capabilities.
Growth in Admissions: The companies are also witnessing growth in revenues on the back of rebounding admissions. With widespread vaccination programs, individuals, who were previously apprehensive of primary care and other specialty care visits in fear of contracting COVID-19, now grew more confident about hospital visits.
Uptake of Technology: The hospital companies are also resorting to technological advancements to meet demands of the market. For instance, companies made investments in telehealth, which gained an encouraging response amid the COVID-19 environment.
3 Stocks on Watchlist
The Zacks Hospital industry, which is housed within the broader Zacks Medical sector, currently carries a Zacks Industry Rank #38. This places it in the top 15% of more than 252 Zacks industries.
The Zacks Hospital industry has grown 41.6% year to date compared with the S&P Index’s rally of 20.8%.
HCA Healthcare, Inc.’s (HCA - Free Report) numerous acquisitions, rising admissions, diversified business and capital deployment should drive long-term growth. Its solid 2021 guidance is impressive as well. The company currently holds a Zacks Rank of 2. Over the past 60 days, the stock has witnessed its 2021 earnings estimate move 18.6% north. Year to date, shares of the company have gained 57%.
Community Health Systems, Inc.’s (CYH - Free Report) telehealth services, declining expenses and accretive acquisitions are key positives. The company is constantly adding to facilities to bolster its business scale. The stock presently has a Zacks Rank #3. Over the past 60 days, the stock has witnessed its 2021 earnings move 13.2% north. Year to date, shares have surged 50.9%.
Tenet Healthcare Corporation (THC - Free Report) is gaining from acquisitions and strategic alliances aimed at boosting its scale of business. Its cost-management program successfully reduced the company’s operating expenses. The stock currently has a Zacks Rank of 3. Over the past 60 days, the stock has seen its current-year earnings estimate being revised 7.9% upward. Year to date, the stock has soared 83.2%.
Image Source: Zacks Investment Research
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3 Hospital Stocks That Outperformed the S&P Index Year to Date
After bearing the brunt of the COVID-19 pandemic, the hospital industry is bouncing back on higher admissions, emergency room visits, value-based care models and its cost-curbing measures.
The said industry has been hard hit by the coronavirus outbreak last year because it had to suspend non-emergency procedures. Moreover, hospitals had to incur huge amounts of costs to treat COVID-19-infected patients. However, things are gradually on the upswing for the industry owing to recovery in revenues. Other factors, such as widespread vaccination programs, constant acquisitions and mergers, and steady technological advancements also aided the industry.
The rapid adoption of technology also enabled companies cater to telehealth requirements. Given the current situation, demand for virtual health services is expected to stay. The hospital industry is booming at the moment and is constantly driving innovation in healthcare services and products. The industry players are also constantly forging alliances to penetrate geographies and meet demands of the market.
Further Upside Left?
We believe that the future prospects of the hospital industry are bright despite several challenges stemming from the COVID-19 pandemic.
The overall bullish scenario makes us optimistic about its consistent growth, which should boost prospects of the participating companies with sound business fundamentals.
Here are some of the factors that will positively impact the companies.
Pursuing Mergers & Acquisitions Strategy: Hospitals continue to intensify focus on M&A strategy, which added facilities and beds to their network, boosted business scale and expanded their geographical presence. These initiatives led to an improved quality of care and brought about diversification benefits, crucial for strengthening a stock’s market position.
The M&A deals, however, suffered a setback from the pandemic-induced volatilities and several such deals were put on hold. Nevertheless, extensive vaccinations and a gradual revival of the global economy will increase the companies’ spending capabilities.
Growth in Admissions: The companies are also witnessing growth in revenues on the back of rebounding admissions. With widespread vaccination programs, individuals, who were previously apprehensive of primary care and other specialty care visits in fear of contracting COVID-19, now grew more confident about hospital visits.
Uptake of Technology: The hospital companies are also resorting to technological advancements to meet demands of the market. For instance, companies made investments in telehealth, which gained an encouraging response amid the COVID-19 environment.
3 Stocks on Watchlist
The Zacks Hospital industry, which is housed within the broader Zacks Medical sector, currently carries a Zacks Industry Rank #38. This places it in the top 15% of more than 252 Zacks industries.
The Zacks Hospital industry has grown 41.6% year to date compared with the S&P Index’s rally of 20.8%.
These hospital stocks hold ample growth prospects to retain stability in the days ahead. Here are three stocks that presently have a Zacks Rank #2 (Buy) or 3 (Hold) and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HCA Healthcare, Inc.’s (HCA - Free Report) numerous acquisitions, rising admissions, diversified business and capital deployment should drive long-term growth. Its solid 2021 guidance is impressive as well. The company currently holds a Zacks Rank of 2. Over the past 60 days, the stock has witnessed its 2021 earnings estimate move 18.6% north. Year to date, shares of the company have gained 57%.
Community Health Systems, Inc.’s (CYH - Free Report) telehealth services, declining expenses and accretive acquisitions are key positives. The company is constantly adding to facilities to bolster its business scale. The stock presently has a Zacks Rank #3. Over the past 60 days, the stock has witnessed its 2021 earnings move 13.2% north. Year to date, shares have surged 50.9%.
Tenet Healthcare Corporation (THC - Free Report) is gaining from acquisitions and strategic alliances aimed at boosting its scale of business. Its cost-management program successfully reduced the company’s operating expenses. The stock currently has a Zacks Rank of 3. Over the past 60 days, the stock has seen its current-year earnings estimate being revised 7.9% upward. Year to date, the stock has soared 83.2%.
Image Source: Zacks Investment Research