17. March 2021 | 07:25 CET
Fresenius SE, Q+M Dental Group, Siemens Healthineers: Where growth meets dividends
The back-and-forth surrounding AstraZeneca's vaccine has unsettled many people. But the discussion about extremely rare side effects also shows: Vaccines and drugs are subject to strict regulations and the healthcare system is strictly regulated. While pharmaceutical companies must always expect setbacks, especially in accelerated approval procedures, the situation is different for suppliers of medical technology or consumables. We present three stocks that are benefiting from rising healthcare spending.
time to read:
ISIN: DE0005785604 , SG2E73981531 , DE000SHL1006
Fresenius: Solid but no more
Fresenius is a Company based in Bad Homburg, Germany, that has dedicated itself entirely to dialysis. When patients suffer kidney failure, this form of blood washing using technical equipment is often the only way to bridge the time until a transplant. The dialysis business accounts for about 50% of sales, artificial nutrition for another 20% and the hospital Company Helios for more than 25%. The hospital services business accounts for about 5%. Fresenius' figures have recently been mediocre: although sales have increased, profits have been lackluster.
Moreover, the share price has been flat for 3 months: the bottom line is a loss of 5.6%. Although Fresenius, focusing on dialysis and its other pillars, is a potential beneficiary of rising healthcare system expenditures, the word is not yet out in the market. Investors who invest for the long term and can tolerate a fair amount of boredom in their portfolio see Fresenius as a dividend stock: around 2.3% yield beckons in this way.
Q&M Dental: The Asian dividend stock with growth fantasy
Q&M Dental is also a dividend stock. The penny stock from Singapore is only a small company at first glance. The operator of 5 dental clinics and 114 practices took an early stake in a manufacturer of corona tests last year and is working with official agencies in Singapore, among others, on the application of these tests, and has put out feelers in other countries. The combination of dental treatments and corona tests seems to be a profitable business for Q&M. In addition to the strong financials, the Company announced a special dividend in early March, in addition to its regular dividend. Overall, the stock brings a dividend yield of around 5% to all investors who have been shareholders in recent weeks.
In addition to its bread-and-butter business of dental treatments, Q&M Dental also sees itself as an innovative company and aims to score points with artificial intelligence in everyday dental practice. The franchise system for dental practices is to be further expanded. Given the success of recent years, it is evident that this will succeed: many dentists seem to feel extremely comfortable under the Q&M umbrella. Since the Company is not only active in Singapore, the share offers investors a comprehensive Asian fantasy and adds to that the test kit business, which Q&M is expected to do for some time to come. The stock has been kissed awake in recent weeks but is still trading under the radar of many investors.
Siemens Healthineers: Surprises loom here
By contrast, the Siemens Healthineers share is much better known. The Company offers equipment related to imaging and diagnostics. Last year, many examinations were postponed or canceled altogether due to the pandemic. As a result, Siemens Healthineers' figures at the end of last year were not so rosy either. But the Company took countermeasures and launched a share buyback last fall. Most recently, Siemens Healthineers announced a stable dividend and thus convinced the market of its merits. Many investors believe that the preventive medical checkup business will return to robust growth in the future. The stock has climbed 14% in the past 3 months and looks promising from a chart perspective. It should only be a matter of time before the share rises above EUR 50.
After that, it will be necessary for Siemens Healthineers to be able to surprise the market. Given the sluggish vaccination business in Germany, it cannot be ruled out that business in the first two quarters of 2021 will again be somewhat less good. The share price could then also run out of steam. Investors who want to sit out this phase can still buy the stock. Those who like it more dynamic should take a closer look at Q&M. Here, Covid-19 fantasy meets a proven business with dental treatments, which is also to be further expanded. Q&M Dental Group's recent dividend could set the tone for the future.