With this level of public funding and ownership, the healthcare industry landscape (from an investment perspective) is quite different from many other countries.
However, Canada has a decent number of publicly listed healthcare companies, even if we disregard the heavy marijuana segment.
Some of the best healthcare stocks in Canada are potentially powerful investment assets that most investors should look into.
Healthcare Stocks In Canada
The “healthcare” sector in the Canadian stock markets includes marijuana stocks, even though not most marijuana companies have sizeable recreational cannabis divisions as well, and based on their revenue from that market segment, they might be better suited to the consumer discretionary category.
And since it’s a sizeable enough sub-category within healthcare, it deserves its own list, and for this list, I will focus on healthcare stocks other than marijuana stocks.
One of the first things you need to know about healthcare stocks in Canada is that it’s pretty diverse. But this diversity comes at a cost. Not all healthcare companies and, consequently, their stock is equally stable.
Healthcare facilities and pharmacies are evergreen businesses, but since there are almost no general healthcare facilities under publicly listed companies in Canada and most of the private pharmacy chains are consolidated under names like Metro.
And pharmaceutical companies are neither as large nor as well known as their US counterparts.
But that doesn’t mean healthcare stocks in Canada have nothing to offer. Under the right circumstances, many healthcare stocks can offer phenomenal growth, and there are also a few conventional, steady growers.
Best Healthcare Stocks In Canada
There are plenty of fantastic healthcare stocks in Canada and a lot of variety to choose from.
The list is arranged by market cap. Unless otherwise specified, all the stocks trade on the TSX.
1. Bausch Health Companies Stock (TSX)
Bausch Health Companies is the largest healthcare stock (by market cap) in Canada and the second-largest pharmaceutical company (Canadian-based) after Apotex, the largest generic drug producer in Canada.
However, it didn’t start as Bausch and had a different name till 2018 – Valeant. Valeant became the most valuable Canadian company in 2015.
Still, after some legal troubles with the US SEC, the company lost most of its valuation and is currently a fraction of its former glory.
The Bosch + Lomb (after the merger) generates most of its revenue from eye-care products (Drugs and other solutions) and a relatively small portion from surgical products.
The company has an impressive international presence, and only about 20% of its revenue comes from within the country.
The stock offers cyclical growth and may allow you to double your capital in about three years if you buy and sell at the right time.
2. Dentalcorp Holdings Stock
Niche: Dental Practice Network
It’s a relatively new company and even newer stock. The company was founded in 2011, and the stock joined the TSX in May 2021 and has mostly fluctuated since inception.
It’s already the largest network of dental practices in the country, with over 445 locations and over 7,100 team members (early 2022). The network as a whole caters to about four million patients a year.
The company offers a unique advantage. By consolidating so many dental practices and professionals under one banner, it will most likely establish itself as the market leader.
By the time any serious competition arises, the company will be too large to topple. The stock offers an early bird advantage and may have the potential for phenomenal growth.
3. Sienna Senior Living Stock
Niche: Senior Housing
The senior population is a substantial part of the total Canadian population and is expected to steadily increase with advances in healthcare and medicine.
Sienna is one of the largest companies (by market cap) in this space and has a portfolio of about 43 long-term care, 27 retirement, and 13 managed residences that collectively have over 11,600 beds (the number of seniors it can cater to).
All of its properties are in Ontario and BC.
Thanks to the nature of its business, the company has significant expenses, and the largest of them is likely the staffing.
However, the company still manages to pay healthy dividends, and the yield is usually relatively high. Its long-term growth prospects are quite minimal.
4. Neighborly Pharmacy Stock
Niche: Pharmacy Chain
As the name suggests, neighborly pharmacy is all about community pharmacies.
It has a decent pace when it comes to acquiring community pharmacies, and between 2018 and 2022 (partial), the company had acquired about 168 pharmacies, and the pace of acquisitions is steadily increasing over the years.
If the company can keep up that pace, it may offer serious competition to Metro and its network of 650 pharmacies.
The stock steadily rose after inception (though it may have been the post-pandemic boost), and the fall was almost as smooth.
But if its small performance history is any indication, the stock will most likely offer consistent growth in the future if it gains traction.
5. WELL Health Technologies Stock
Niche: Digital Healthcare
Telehealth/digital health got a lot of limelight during the pandemic, but it was not an isolated incident.
As technologies improve and become more accessible, the merger of health and digital technologies will evolve further, and companies like Well Health will thrive.
Its primary focus is providing healthcare practitioners a platform, and by the end of 2021, the platform supported over 15,000 practitioners and had 36 different health applications under its banner.
The stock saw phenomenal growth of about 1,600% between its inception (April 2016) and pre-pandemic peak (Feb 2020).
And even though it’s hard to replicate that kind of growth, the stock is still a powerful capital appreciation asset.
6. Andlauer Healthcare Group Stock
Niche: Healthcare Logistics/Delivery
Andlauer Healthcare is primarily a logistics and transportation business, but it caters specifically to the healthcare industry.
It prides itself in its end-to-end delivery solutions and has a decent network of operating centers, distribution centers, and cross docks.
It’s connected to pharmaceutical manufacturers like Pfizer and Bayer, wholesalers/distributers like Shoppers Drug Mart and Jean Coutu, and third-party logistics companies like UPS.
It also operates in the US via its subsidiaries and a fleet of 150 trucks and 200 trailers.
The company managed to gain a decent position in a niche healthcare market, and its stock, which started trading on the TSX in 2019, has mostly gone up since inception.
7. BELLUS Health Stock
Bellus is another company that is currently a fraction of its glory days. In the pre-recession times (between 2002 and 2007), the company used to trade over $3,000 per share.
And in the last decade, it struggled to cross the $20 a share mark.
That said, the company is certainly capable of decent cyclical growth, and in the last five years, it has offered two distinct growth phases: About 1,500% growth between March 2017 and July 2020, and the second one was post-pandemic, which pushed the stock up almost 250% at its best.
It’s basically a clinical-stage pharmaceutical company and is focused on a specific antagonist, primarily against chronic cough.
If the treatment its development gets approved by the FDA, the stock may shoot up at an incredible pace.
8. Extendicare Stock
Niche: Senior Care
Extendicare owns and operates a network of about 120 senior care and retirement facilities. It has five different brands under the Extendicare banner, three of which cater directly to the customers.
That includes long-term care, retirement living, and home healthcare. The other two are B2B brands. The bulk of the company’s Net Operating Income is generated by the Long-term Care segment of the business.
Extendicare may offer cyclical growth, but the return potential is not high enough for how protracted it is.
However, the company’s generous dividend yield is one of the main reasons people consider investing in this stock. And since its financials don’t fluctuate much, the dividends are relatively safe.
9. HLS Therapeutics Stock
HLS therapeutics, while not a drug manufacturer by default, basically acquires and commercializes late-stage drugs/pharmaceutical products, which essentially means that these drugs are quite close to entering the mainstream market.
The company focuses on two areas in particular: The cardiovascular and central nervous systems.
One major product associated with HLS Therapeutics is Vascepa, a drug that reduces the risk of a heart attack.
The stock only became profitable in the last few years, after a long period of stagnation between (2013 and 2017).
It rose over 900% between 2018 and early 2020, but it has been slowly going down since its 2020 peak. But if it’s capable of another such growth phase, you should consider investing in it.
10. Dialogue Health Technologies Stock
Niche: Healthcare Platform
Dialogue Health Technologies offers an integrated healthcare platform that focuses on health benefits.
It’s primarily a B2B company that offers its platforms to businesses to offer it to their employees, so they can navigate their health benefits more efficiently and the most out of them.
It also facilitates virtual healthcare, which may play a critical role in this platform’s growth going forward.
The platform is already used by about 25,000 organizations and, through them, serves millions of Canadians.
The company looks promising; the stock, however, does not. From its inception, it fell to about 70% by March 2022. However, it may turn things around in the future as its use becomes more mainstream.
11. Zentek Stock (TSXV)
Niche: Amalgamation Of Healthcare And Nano-Tech
Zentek is quite a forward-looking company. Its primary focus is nano-technology, and the company is currently exploring its uses in three healthcare dimensions: prevention, detection, and treatment.
Its prevention segment focused on masks during COVID, while the detection segment created a rapid testing technology.
The treatment segment of the company’s business focuses on developing antimicrobial therapies.
The stock usually remains quite stagnant, but certain market conditions (like the post-pandemic growth momentum) can push it up at an incredible pace.
So the best strategy is to buy as low as you can and wait for the next peak to sell.
12. Hamilton Thorne Stock (TSXV)
Niche: Proprietary Laser Technology (and solutions) For Healthcare
Hamilton Thorne is a US-based company and a Canadian stock, and it’s one of the most consistent growth stocks (at least since 2016) in the healthcare sector.
The company has a proprietary laser technology that it uses in a variety of image analysis and microsurgery solutions, especially in the field of IVF.
This micro-cap company operates via six different brands and has a healthy and geographically diverse clientele. It also caters to about two-fifth of the total market (clinics around the globe).
Thanks to its competitive advantage in a niche and stable market segment of healthcare and its powerful capital appreciation potential, it has risen as one of the best healthcare stocks in Canada.
13. Profound Medical Stock
Niche: Incision-free Therapies
Profound Medical has partnered with globally well-known names (Siemens, Phillips, and GE) and is currently in the process of commercializing two technologies.
One is TULSA-PRO® which offers incision-free Inside-Out Prostate Disease Ablation. The other is Sonalleve, which offers the opposite of TUSLA, i.e., Outside-In Disease Ablation, using Ultra-High-Frequency Sounds.
The stock is worth considering because it experienced powerful growth before the pandemic-drive market crash and, if bought at the right price, might be able to offer decent growth if it starts following that growth trajectory again.
14. Kneat.com Stock
Niche: Paperless Validation
Kneat is more of a tech platform than a healthcare stock, but since it caters primarily to life science companies, it’s part of the healthcare sector in Canada.
The company is based in Ireland and has one of the most widely used e-validation software in the pharma industry, and seven out of the top ten pharmaceutical companies in the world already use Kneat for their E-validation needs.
It’s a decent growth stock, but the rapid growth can also turn into a brutal correction.
So, avoid buying at or near the peak, especially if it’s growing uncharacteristically fast due to a catalyst like the post-pandemic growth momentum.
15. Viemed Healthcare Stock
Niche: Home Healthcare
Another US-based company that you might consider investing in is Viemed. It provides a very specific home care service, i.e., Home Respiratory Care.
According to the company’s estimate, about 25 million people in the US suffer from Chronic Obstructive Pulmonary Disease, and many of them (based on the severity of the disease) need the services that Viemed provides.
The company was the third-largest provider in that sphere in 2022. It doesn’t just offer services but also provides a decent selection of products specific to the care of such patients.
The stock’s performance has been quite decent so far, and in a healthy market, it may offer powerful growth.
How To Buy Healthcare Stocks In Canada
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Most healthcare stocks in Canada offer cyclical growth. Some offer linear growth always and a few under the right circumstances.
The percentage of dividend stocks is low, but the few that offer dividends are worth considering, thanks to their yield.
The best healthcare stocks in Canada are a powerful asset pool that you should look into and pick the companies that match your investment goals and risk tolerance.
And if you want relatively more diversified exposure to healthcare, these Biotech ETFs may be worth looking into.