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I am a full time private investor, focussed on dividend and value stocks.
  • 3 Cheapest Healthcare Stocks To Consider 0 comments
    Aug 2, 2011 4:12 AM | about stocks: NHC, SPAN, WLP, AET, HUM, UNH, ENSG, CHE, UHS, IVC, CI

    Cheap stocks are necessary for good total returns. If the company is in a sector with rosy perspectives too, there could no better investment.

    I screened the healthcare sector by stocks with 3 pricing ratios. At first, I selected the forward price to earnings ratio and chose a value of less than 15. This ratio considers the future growth and is in my view a better indicator than the current price to earnings ratio. Second, I used the price to sales ratio with a value of under 1. This ratio shows me how many stocks are cheaper than the actual market capitalization. It also delivers me many low margin stocks, such stocks have in my view margin upside potential. Finally, I sorted my results by highest dividend yield.

    As result, I had 59 interesting stocks of which 11 pay dividends. Nearly half of my results came from the healthcare plans industry.

    Here are my 3 most promising stocks from the screening results:

    1. WellPoint (WLP) is acting within the healthcare plans industry. The company has a market capitalization of USD 23.6 billion, generates revenues in an amount of USD 59.2 billion and a net income of USD 2.9 billion. It follows Price/Earnings ratio is 8.7 and forward price to earnings ratio 8.5, Price/Sales 0.4 and Price/Book ratio 0.9. Here are additional dividend information: Dividend Yield: 1.53 percent | Years of Consecutive Dividend Increasing: 0 Years | 5-Year Dividend Growth: 0 percent | Dividends Since 2011.

    2. Universal Health Services (UHS) is acting within the hospitals industry. The company has a market capitalization of USD 4.5 billion, generates revenues in an amount of USD 6.1 billion and a net income of USD 271.8 million. It follows Price/Earnings ratio is 16.7 and forward price to earnings ratio 10.2, Price/Sales 0.7 and Price/Book ratio 2.2. Here are additional dividend information: Dividend Yield: 0.4 percent | Years of Consecutive Dividend Increasing: 2 Years | 5-Year Dividend Growth: 4.8 percent | Dividends Since 2003.

    3. Unitedhealth Group (UNH) is acting within the healthcare plans industry. The company has a market capitalization of USD 52.0 billion, generates revenues in an amount of USD 98.4 billion and a net income of USD 4.9 Billion. It follows Price/Earnings ratio is 10.8 and forward price to earnings ratio 10.1, Price/Sales 0.5 and Price/Book ratio 1.9. Here are additional dividend information: Dividend Yield: 1.4 percent | Years of Consecutive Dividend Increasing: 1 Year | 5-Year Dividend Growth: 132.69 percent | Dividends Since 1990. 

    Take a closer look at the full table. The average price to earnings ratio (P/E ratio) of the list amounts to 12.35 while the average forward price to earnings ratio is 10.15. The dividend yield has an average value of 1.29 percent. Price to book ratio is 1.69 and price to sales ratio 0.62. The average operating margin amounts to 8.78 percent.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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