The global health care industry is growing faster than the economy. And the U.S. accounts for almost half of total worldwide expenditure on healthcare. While the coronavirus pandemic has significantly increased the importance of the healthcare sector, at the beginning its effects took a serious toll on medical devices companies.
Most elective surgeries were postponed or canceled due to COVID-19 at the start of the pandemic, which significantly impacted medical devices companies. However, because people are now being vaccinated in increasing numbers and hospital admittances for COVID-19 care are declining, many people are now rescheduling their elective surgeries. Consequently, medical devices companies are witnessing increasing demand for their products. Indeed. the global medical devices market is expected to grow at a CAGR of 5.4% between 2021 and 2025.
IDEXX Laboratories (IDXX), ResMed, Inc. (RMD), Hologic, Inc. (HOLX), Waters Corporation (WAT), and PerkinElmer, Inc. (PKI) are the best performing companies in the medical devices space. We believe their strong fundamentals and sustained focus on innovation should help the shares of these companies keep moving higher this year and beyond.
IDEXX Laboratories (IDXX)
IDXX is involved in the manufacture and marketing of products related to dairy markets, livestock, poultry, and companion animals. The company has global operations. IDXX has gained 98.2% over the past year to close Wednesday’s trading session at $498.02.
The company recently launched the ProCyte One Hematology Analyzer. The product is designed to simplify workflow without compromising on quality. The company has also expanded its imaging portfolio with its new ImageVue DR30 Digital Imaging System.
For the quarter ended December 31, 2020, IDXX reported revenue growth of 19% versus the same period last year. Its EPS grew 93% during the same period.
IDXX is expected to see a revenue growth of 18.3% for the quarter ended March 31, 2021 and 14.4% in 2021. Its EPS is estimated to grow 13.1% in 2021 and at a rate of 17.1% per annum over the next five years.
IDXX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
It has an A grade for both Sentiment and Quality, and B for Growth, Momentum, and Stability. In the Medical – Devices & Equipment industry, it is ranked #4 of 183 stocks.
In total, we rate IDXX on eight different levels. Beyond what we’ve stated above we have also given IDXX a grade for Value. Get all the IDXX ratings here.
ResMed, Inc. (RMD)
RMD manufactures and markets devices and equipment for the treatment and management of respiratory diseases. The company has a special focus on sleep-disordered breathing. RMD has returned 15.1% over the past year to close yesterday’s trading session at $190.21.
The company recently introduced its AirMini product, which is the smallest CPAP machine in the world. The new product revolutionizes the management of sleep apnea because it is small enough to be pocket-sized.
For the quarter ended December 31, 2020, the company’s revenue increased 9% year-over-year. RMD’s net operating profit increased 12% during the same period.
RMD’s revenue is estimated to increase 4.4% for the quarter ended March 31, 2021 and 6.8% in 2021. Its EPS is expected to rise 10.1% in 2021 and 22.1% per annum over the next five years.
It’s no surprise that RMD has an overall rating of A, which equates to Strong Buy in our POWR Ratings system. RMD has a B grade for Stability, Sentiment, and Quality. In the Medical – Devices & Equipment industry, it is ranked #15.
Click here to see the additional POWR Ratings for RMD (Growth, Momentum, and Value).
Hologic, Inc. (HOLX)
HOLX makes and supplies diagnostic tools and surgical products. The company has international operations. HOLX’s stock has returned 52.3% over the past year and its last closing price was $71.97.
HOLX recently acquired Diagenode, which is a European maker of epigenetic products and molecular diagnostic arrays, for $159 million. The company has also completed the acquisition of Biotheranostics, which is a leader in the oncology space.
For the quarter ended December 26, 2020, HOLX’s revenue increased 89.3% year-over-year. Its diluted EPS gained 74.8% during the same period.
FB is expected to see a revenue growth of 32.5% for the quarter ended March 31, 2021 and 24.9% in 2021. Its EPS is estimated to grow 12.3% in 2021 and 21.5% per annum over the next five years.
HOLX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary ratings system. HOLX has an A grade for Growth and Value, and B for Momentum, Sentiment, and Quality. In the same industry, it is ranked #1.
Beyond what we stated above we have also given HOLX grades for Stability. Get all the HOLX ratings here.
Waters Corporation (WAT)
WAT is involved in the manufacture and supply of chemistry-related consumables and instrument systems. The company has an international presence. WAT’s stock has gained 31.9% over the past year. It closed the last trading session at $265.78.
WAT’s recently partnered with TetraScience, a cloud technology company, to offer the Empower DataScience Link. The new offering combines cloud technology with a market leading Empower Chromatography Data System (CDS). The company has also launched a new liquid chromatograph called Waters Acquity Premier Solution.
For the fourth quarter, tWAT’s sales increased 10% compared to the same period last year. Its GAAP EPS grew 14% during the same period.
WAT is expected to see a revenue growth of 12.4% for the quarter ended March 31, 2021 and 8.4% in 2021. The company’s EPS is estimated to grow 6.1% in 2021 and 7.2% per annum over the next five years.
It’s no surprise that WAT has an overall rating of A which translates to a Strong Buy in our POWR Ratings system. WAT has an A grade for Quality, and B for Momentum, Growth, and Value. In the Medical – Devices & Equipment industry, it is ranked #3.
Click here to see the additional POWR Ratings for WAT (Sentiment and Stability).
PerkinElmer, Inc. (PKI)
PKI delivers diagnostic and research solutions in the human health and environmental health segments. The company has global operations. PKI has returned 46.6% over the past year, and its last closing price was $126.38.
The company has introduced the PerkinElmer COVID-19 Antigen test which can provide results in 15 minutes. Also, PKI recently launched the first Cell Painting Kit, which is part of its portfolio of PhenoVue cellular imaging reagents.
For the quarter ended January 3, 2021, the company witnessed an increase in revenue of 68% year-over-year. Its GAAP operating income increased 269% during the same period.
PKI is expected to see a revenue growth of 81.5% for the quarter ended March 31, 2021 and 10.4% in 2021. The company’s EPS is estimated to grow 8.9% in 2021 and 17.2% per annum over the next five years.
The POWR Ratings are also high on PKI. It has an Overall Rating of A, which translates to a Strong Buy. PKI also has an A grade for Growth and Value, and B for Momentum and Sentiment. In the same industry, it is ranked #8.
Beyond what we stated above we also have given PKI’s grades for Quality and Stability. Get all the PKI ratings here.
he POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
Want More Great Investing Ideas?
9 “MUST OWN” Growth Stocks for 2021
How to Ride the 2021 Stock Market Bubble
5 WINNING Stocks Chart Patterns
K.I.S.S. for the March Stock Market
IDXX shares were trading at $491.11 per share on Thursday afternoon, down $6.91 (-1.39%). Year-to-date, IDXX has declined -1.75%, versus a 2.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.
The post 5 “Strong Buy” Medical Device Stocks to Own in 2021 appeared first on StockNews.com