The healthcare industry’s prospects look promising for the upcoming years, thanks to growing medical needs and technology upgrades. Moreover, due to inelastic demand for their products and services, healthcare companies tend to perform relatively well regardless of economic conditions.
Therefore, quality medical stocks USANA Health Sciences, Inc. (USNA), LifeVantage Corporation (LFVN), and Nature’s Sunshine Products, Inc. (NATR) could be wise additions to your portfolio now.
Before delving deeper into the fundamentals of these stocks, let’s discuss what’s happening in the medical industry.
Medical technological advancements, such as AI and gene editing, are transforming disease detection and treatment, increasing the likelihood of favorable outcomes in the healthcare industry.
According to Statista, the worldwide pharmaceuticals market is predicted to grow at a 5.8% CAGR to reach $1.48 trillion by 2028. Oncology drugs are the largest segment, with a forecasted market volume of $188.20 billion in 2023.
Moreover, the global digital health market is anticipated to grow at a CAGR of 25.3% until 2032. It is expanding rapidly due to rising demand for home diagnosis, IT infrastructure upgrades, and user-friendly digital health platforms, with telehealth, mHealth, and personalized healthcare experiences shaping market dynamics.
In light of these encouraging trends, let’s look at the fundamentals of the three Medical - Consumer Goods stock picks, beginning with number 3.
Stock #3: USANA Health Sciences, Inc. (USNA)
USNA develops and manufactures high-quality nutritional supplements, functional foods, and personal care products. The company offers USANA nutritional products that comprise essentials/CellSentials, such as vitamin and mineral supplements that provide a foundation of total body nutrition for various age groups.
USNA’s trailing-12-month gross profit margin of 80.50% is 140.6% higher than the 33.46% industry average. Its trailing-12-month net income margin of 6.69% is 54.1% higher than the industry average of 4.34%.
USNA’s total current assets came in at $387.65 million for the period that ended July 1, 2023, compared to $384.38 million for the period that ended December 31, 2022. Also, its total current liabilities came in at $113.84 million, compared to $143.83 million for the same period.
The consensus revenue estimate of 967.19 million for the year ending December 2024 represents a 4% increase year-over-year. Its EPS is expected to grow at 16.9% year-over-year to $3.67 for the same period. It surpassed EPS estimates in three of four trailing quarters. USNA’s shares have gained 4.4% year-to-date to close the last trading session at $55.45.
USNA’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
USNA also has an A grade for Value and Quality and a B for Stability. It is ranked #3 out of 10 stocks in the B-rated Medical - Consumer Goods industry. Click here for the additional POWR Ratings for Growth, Sentiment, and Momentum for USNA.
Stock #2: LifeVantage Corporation (LFVN)
LFVN engages in identifying, researching, developing, formulating, selling, and distributing nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care products, bath and body, and targeted relief products.
LFVN’s trailing-12-month asset turnover ratio of 3.12x is 263.9% higher than the 0.86x industry average. Its trailing-12-month gross profit margin of 79.67% is 138.1% higher than the 33.46% industry average.
LFVN’s revenue grew 6.4% year-over-year to $54.22 million in the fourth quarter that ended June 30, 2023. The company’s operating income increased 74% year-over-year to $2.60 million.
The company’s non-GAAP net income and EPS amounted to $2.16 million and $0.17, up significantly from the prior-year quarter, respectively.
Over the past six months, the stock has gained 130.3% to close the last trading session at $7.28.
LFVN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
It is ranked #2 in the Medical - Consumer Goods industry. It has an A grade for Growth, Value, and Quality. To see additional LFVN ratings for Momentum, Sentiment, and Stability, click here.
Stock #1: Nature’s Sunshine Products, Inc. (NATR)
NATR is a natural health and wellness company that manufactures and sells nutritional and personal care products in Asia, Europe, North America, Latin America, and internationally.
NATR’s trailing-12-month gross profit margin of 71.93% is 114.7% higher than the 33.46% industry average. Its trailing-12-month asset turnover ratio of 1.84x is 115.1% higher than the 0.86x industry average.
For the fiscal second quarter, which ended June 30, 2023, NATR’s revenue increased 11.9% year-over-year to $116.55 million, while its adjusted EBITDA grew 25.9% from the year-ago value to $11.31 million.
The company’s adjusted net income and EPS amounted to $2.42 million and $0.12, up 369.4% and 300% from the prior-year quarter, respectively.
Analysts expect NATR’s revenue to increase 6.2% year-over-year to $448 million for the year ending December 2023. Its EPS is expected to grow significantly year-over-year to $0.64 for the same period. It surpassed EPS estimates in three of four trailing quarters. The stock has gained 102.6% over the past year to close the last trading session at $16.51.
It’s no surprise that NATR has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth, Value, Sentiment, and Quality and a B for Stability. It is ranked first in the same industry.
Beyond what is stated above, we’ve also rated NATR for Momentum. Get all NATR ratings here.
What To Do Next?
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USNA shares were trading at $55.35 per share on Friday morning, down $0.19 (-0.34%). Year-to-date, USNA has gained 4.04%, versus a 14.26% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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