Healthcare is one sector that provides shelter to investors during volatile market conditions. In Europe and the US the majority of the population is living longer due to hi-tech medical care and advances in medical diagnostics. Baby boomers in the USA are expected to retire in the millions in the next few years. These folks will need additional medical services than the current system can accommodate. Hence healthcare equipment makers will benefit as hospitals and other institutions replace existing outdated devices and add additional capacity to meet the demand.
In this post let's take a quick review at four healthcare equipment makers from Europe.
1. EDAP is France-based company "engaged in the development, production and marketing of medical devices, mainly for urological diseases". EDAP makes equipment that are widely used in the treatment of urinary stones and prostate cancer. EDAP has a market cap of just $16M and it pays no regular dividends. Annual revenue growth is 8%.
2. Based in Germany, Fresenius Medical Care (FMS) "is a kidney dialysis company, operating in both the field of dialysis products and the field of dialysis services". In 2008, the company made 27.9 million dialysis treatments and it sells it products in 115 countries. Total annual revenue in 2008 was $10.7B. Average annual revenue growth is about 20%. The current yield is 1.86%.
3. Ireland-based ICON plc (ICLR) is "a contract research organization (CRO), providing outsourced development services on a global basis to the pharmaceutical, biotechnology, and medical device industries." The Company operates in 71 locations in 38 countries. Annual revenue is excellent at 27%. But the company pays no dividends. In 2008, total sales was around $900 M.
4. The British company Smith & Nephew (SNN) "is a global business engaged in the development, manufacture, marketing and sales of medical devices in the sectors of orthopaedics, which includes reconstruction, trauma and clinical therapies, endoscopy and advanced wound management." Average annual earnings growth is 11% and the company had total sales of $3.8B last year. SNN's current dividend yield is 2.11%. Revenues have increased every year since 2000.