Canadians: 2 Cheap Healthcare Stocks to Own in Your TFSA Forever

The healthcare sector is booming, and stocks like Savaria Corporation (TSX:SIS) can be had for cheap as global stocks are being routed right now.

| More on:

Health care is a sector that has rivaled technology with its propensity to excite the investing world. According to a recent report from ResearchAndMarkets, the global healthcare market reached a value of $8.45 trillion in 2018. It projects that this market will reach $11.9 trillion by 2022. This would represent a CAGR of 8.9% over the forecast period.

In previous articles, I’d discussed why the Tax-Free Savings Account is such an effective growth vehicle. Healthcare stocks make a great target for investors who are hungry for potentially massive long-term growth.

The coronavirus outbreak has stirred global panic, and markets have been pummeled in the final week of February. Healthcare stocks have not been spared, but the fears surrounding this outbreak also illustrate just how crucial the development of this sector is going forward. Today, I want to look at two healthcare-linked stocks that would make a terrific hold in a TFSA to start this decade.

Savaria

Canada and most of the developed world are facing rapidly expanding senior citizen populations. Aging demographics will have an enormous impact on the healthcare sector. Savaria (TSX:SIS) is a stock I’ve been bullish on for some time now. This company designs, engineers, and manufactures products for personal mobility in Canada, the United States, and countries around the world.

Shares of Savaria have plunged 10% over the past week at the time of this writing. The stock has struggled over the past year — falling 5% as of close on February 26 — but it has been a high performer over the past decade. A Reports and Data forecast released in 2019 projected that the personal mobility devices market would reach $12.4 billion by 2026, which would represent a CAGR of 6.7% over the forecast period.

Savaria stock last possessed a P/E ratio of 26 and a P/B value of 2.3, which sits below the industry average. The company is moving forward with an excellent balance sheet. Shares last had an RSI of 26, which puts Savaria in technically oversold territory. Better yet, Savaria offers a monthly dividend of $0.0383 per share. This represents a 3.7% yield.

CRH Medical

CRH Medical (TSX:CRH) is a Vancouver-based company that, through its subsidiaries, provides anesthesiology services to gastroenterologists in the United States. Its shares had plunged 10.7% over the past week as of close on February 26. However, the stock was still up 16% year over year.

Investors can expect to see its fourth-quarter and full-year results for 2019 in March. In the third quarter, total revenue rose 5.9% year over year to $30.4 million, and adjusted operating EBITDA increased 42.9% to $13.1 million. In the year-to-date period, total adjusted operating EBITDA climbed to $39.4 million compared to $38.8 million in the first nine months of 2018.

This company boasts solid growth potential as we look ahead. A report from Grand View Research recently projected that the gastrointestinal therapeutics market would register a CAGR of 6.6% from 2018 through 2025. CRH Medical stock is in favourable value territory compared to its industry peers, as it currently possesses a price-to-book value of 3.4. Investors should keep an eye on its stock, as it is trending towards technically oversold territory at the time of this writing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends CRH Medical and Savaria.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »