4 Different Types of Healthcare Stocks to Invest In
If you are worried about a recession, it may be wise to add some defensive stocks to your portfolio. Defensive stocks are stocks that can ride through a recession unscathed, due to the inelastic nature of their business. One of the industries that is often touted as being highly defensive is the healthcare business. Unlike most other industries, healthcare is a necessity that people will spend money on, regardless of the economic conditions at that time.
Furthermore, with technology and the emphasis on healthy living, people are starting to live longer than ever before. This has led to higher expenditure on healthcare, making healthcare stocks even more profitable. In light of this, here are four different types of healthcare stocks that we can consider.
Hospital and health services stocks
Singapore is home to some of the biggest and most recognised hospitals in the region. Not only do they provide some of the best and latest technology and expertise, but they also offer more attractive prices than countries such as Korea and Japan, making Singapore an ideal destination for medical tourism.
Some of the hospital and health services stocks listed in Singapore also have footprints regionally and in the Asia Pacific region, giving them access to even more opportunities.
However, because of the optimism surrounding these businesses, many of the stocks may be priced at a premium relative to other industries. Investors should be mindful not to overpay for these stocks.
There are many long-running pharmaceutical businesses that have been regular dividend payers. Some of them have even achieved the status of dividend aristocrats as they have increased their dividends paid each year for the past 25 years.
Although there are not many pharmaceutical stocks listed here, investors may take note of those listed regionally and in the Asia Pacific region such as Korea and China.
When looking at pharmaceutical stocks, it may be important to keep an eye out for companies with strong product diversity, a solid pipeline of products, a capable research team and patented products.
Medical technology stocks
Technology has greatly changed the landscape of healthcare in recent years. There are new developments in investigative measures such as the Spider ECG scanner that is smaller than the traditional ECG scanners or mobile apps that help patients keep track of appointments and medications.
Singapore is currently home to some of the best medical technology start-ups. A growing number of entrepreneurs have focused their efforts to improve the health of the healthcare system. With government support and a push to integrate technology with healthcare, Singapore is primed to be a leader in this regard.
As investors, it is important to look for companies that are innovative and have a strong leader who understands the challenges that the industry faces.
Medical equipment and supplies stocks
Surgeries and medical procedures are growing at a rapid pace. This has seen some of the medical devices and supply stocks benefit as a consequence.
Singapore is currently home to some of the in the business that are leaders in their field. Examples of medical supplies and devices that are manufactured here include catheters, stents and rubber gloves.
The Foolish bottom line
Healthcare stocks are in a good position to prosper due to the growing healthcare industry and defensive nature of the business. Investors looking at this industry can choose between companies operating within these four sub-categories.