The CVS is fired in all cylinders.
Why is the healthcare industry the best place to find investments now?
There are main reasons for the tree. First, US healthcare spending is growing rapidly. The industry already accounts for more than 17% of the economy, and is expected to grow on average 5.8% per year until 2033, when it should account for more than a fifth of the economy.
Second, the healthcare industry is widely considered to endure a recession, or at least tolerate a very recession. Historically, the sector has worked well during the recession, as people need healthcare and find ways to pay for it even if the economy is under contract.
And the third reason is demographics. American society is grey. The number of Americans over 65 is projected to increase from 62 million in 2024 to 84 million within 30 years, with the number of 100 and over 100 is expected to quadruple over that time frame. It is no secret that people generally need more health care as they age.
The Giant of Health
So, what are some good ways investors can take advantage of these trends and take part in the relentless expansion of their industry? There are many ways to invest in pharmaceutical manufacturers, medical device manufacturers, health insurance companies, care providers, and more.
One health company has operations spanning many of these sectors. In fact, you may have visited one of the places in the past month. In addition to all 50 states, there are around 9,600 stores in the Columbia and Puerto Rico areas, with 85% of Americans living within one to ten miles.
I'm talking about CVS health (CVS) 0.43%)). CVS is more than a pharmacy chain. It offers healthcare services such as lab testing, health screening, vaccinations and treatment of minor injuries at in-store clinics. We employ more than 40,000 doctors, pharmacists, nurses and nurses to enable these services.
It also owns Aetna, a health insurance company that it acquired in 2018. It covers 36 million people and is the fifth largest health insurance company in the country.
Ah, the Pharmacy Part: CVS Health has a 27% share of pharmacy prescriptions nationwide.
Image source: Getty Images.
Strong results
Currently, the CVS is fired in all cylinders. The company announced its second quarter results on July 31, with both revenue and revenue shattering Wall Street estimates. The company has also increased its annual earnings per share guidance from the $6.00 to $6.20 range to the $6.30 to $6.40 range. The report has sharply raised the stock price, rising 18% in August.
Analysts are currently hoping to grow annual revenues of 15% in 2025 and 13% in 2026.
However, the stock remains inexpensive and trades with a positive earnings estimate of just 10 times.
CVS is also expanding. Currently, he has swallowed many places of ritual aid for competitors who filed for bankruptcy protection in May, and even better, he has obtained a prescription file for ritual aid.
CVS's market capitalization is approximately $90 billion, and as the market approaches on September 10th, stock prices have risen 65% per year. Stocks have fallen by about 30% over the past three years. But the company is rewarding investors. Last year, the company repurchased about 40 million shares and paid a dividend of $3.3 billion.
It's on sale now
As a result, CVS is on track and stocks are on sale. They were recently immersed in a bit when CVS executives refused to give guidance on future government ratings that would affect the amounts they could get from the Medicare Advantage Plan.
But that's not a concern. CVS said it would not provide guidance during its quarterly revenue report.
Savvy investors will use this opportunity to pick up some of the growing healthcare provider stocks in light of the company's potential. CVS has many advantages.
