The healthcare industry has historically attracted robust investor interest. According to a Modern Healthcare report, national health expenditures have increased tremendously over the past several years. With the resurgence of COVID-19 cases due to the rapid spread of its highly transmissible Delta variant, the industry is expected to continue enjoying the spotlight. Furthermore, the healthcare industry is considered relatively stable in terms of performance, given a near inelastic demand for healthcare products, which is part of what makes it an investor favorite.
Governments worldwide are spending billions of dollars to improve the healthcare industry, and companies in this space are quickly innovating to address the growing healthcare needs of an aging population.
West Pharmaceutical Services, Inc. (WST)
WST in Exton, Pa. designs and produces containment and delivery systems for injectable drugs and healthcare products. The company operates in two segments: Proprietary Products and Contract-Manufactured Products. While its Proprietary Products segment offers stoppers and seals for injectable packaging systems, its Contract-Manufactured Products segment designs, manufactures, and assembles surgical devices.
The company paid a quarterly dividend of $0.17 per share on August 4, 2021. In addition, WST has consistently increased its dividends for the past 28 years. This reflects its solid financial strength.
WST’s net sales increased 37.3% year-over-year to $723.60 million in the second quarter, which ended June 30, 2021. Its adjusted operating profit increased 99.2% year-over-year to $211.20 million. The company’s adjusted EPS came in at $2.46, up 97% year-over-year, and its revenue and EPS have increased at CAGRs of 14.6% and 50.8%, respectively, over the past three years.
Analysts expect WST’s EPS and revenue to increase 50% and 24.8%, respectively, year-over-year to $7.14 and $2.68 billion its fiscal year 2021. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has soared 57.7% over the past year to close yesterday’s trading session at $429.72.
WST’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has an A grade for Sentiment, and a B grade for Growth. Within the Medical – Devices & Equipment industry, WST is ranked #30 of 187 stocks.
To see WST’s ratings for Value, Momentum, Stability, and Quality, click here.
Alkermes plc (ALKS)
Headquartered in Dublin, Ireland, ALKS is a biopharmaceutical company that researches, develops, and commercializes pharmaceutical products to address the unmet medical needs of patients in various therapeutic areas internationally. Its marketed products include ARISTADA, VIVITROL, RISPERDAL CONSTA, and INVEGA SUSTENNA.
On June 1, the U.S. Food and Drug Administration (FDA) approved ALKS’ LYBALVI (olanzapine and samidorphan) to treat adults with schizophrenia and bipolar I disorder. In addition, it offers established antipsychotic efficacy of Olanzapine with less weight gain, which could lead to increased sales of this oral medication.
ALKS’ revenue surged 23% year-over-year to $303.70 million in the second quarter, which ended June 30, 2021. Its non-GAAP net income came in at $49.20 million, representing a 453% year-over-year increase. The company’s non-GAAP EPS was $0.30, up 400% year-over-year. Its revenue and EBITDA increased at CAGRs of 2.5% and 34.9%, respectively, over the past three years.
For its fiscal year 2022, analysts expect ALKS’ EPS to increase 82.4% year-over-year to $0.93. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Its revenue is expected to be $297.32 million for the quarter ending September 30, 2021, representing a 12.2% year-over-year rise. Over the past nine months, the stock’s price has soared 67.2% to close yesterday’s trading session at $28.96.
ALKS’ POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary rating system. In addition, it has an A grade for Growth and Value, and a B grade for Quality.
Want More Great Investing Ideas?
WST shares were trading at $432.36 per share on Friday afternoon, up $2.64 (+0.61%). Year-to-date, WST has gained 52.85%, versus a 19.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|WST||Get Rating||Get Rating||Get Rating|
|ALKS||Get Rating||Get Rating||Get Rating|