HPT vs. HCP: Which Stock Should Value Investors Buy Now?
Boston Scientific Corporation BSX has been gaining investor confidence on consistently positive results. Over the past six months, the company’s share price has outperformed its industry. The stock has gained 6.9% compared with the industry’s 6% gain. Also, the company has outperformed the S&P 500’s 4.5% gain.
This developer, manufacturer, and marketer of medical devices for use in interventional medical specialties has a market cap of $41.77 billion. The company has an earnings growth rate of 10.1% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 60 days, 11 analysts revised their estimates upward with no movement in the opposite direction. Resultantly, earnings estimates rose around 1.5% to $1.39.
Let’s find out whether the recent positive trend is a sustainable one.
Solid Quarterly Performance
Boston Scientific exited the first quarter of 2018 on a solid note with better-than-expected earnings and revenues. We are upbeat about the company witnessing growth across all business lines and geographies.
Strategic Buyouts to Fortify EP Business
We are upbeat about Boston Scientific’s recent acquisition of Apama Medical. Through the deal, Boston Scientific aims to expand its suite of arrhythmia solutions which fall under its Electrophysiology (EP) sub-segment. Further, to gain traction in the EP market, Boston Scientific announced plans to acquire Securus Medical — a privately-held developer of thermal monitoring system for the continuous measurement of esophageal temperature.
An important part of Boston Scientific’s growth strategy is to continue pursuing development opportunities outside the United States by expanding global presence, inclusive of the emerging markets. Boston Scientific is gradually strengthening its presence in the emerging markets, including Brazil, Russia, India and China (BRIC). In first-quarter 2018, business from the emerging markets registered 17% growth.
The company is gaining strong ground in India as well. It targets about 10 emerging markets for additional emphasis. Boston Scientific hopes to sustain strong overall international performance on product launches that are in the early stages of rollout.
Suspension of MedTech Tax
The decision by the U.S. House and Senate to suspend the medical device tax for another two years has come as a breather for medical device bigwigs like Boston Scientific. According to the company, although temporary, the suspension will allow it to continue with its plans to invest in innovative medical products. The company, meanwhile, has plans to work on the full repeal of the MedTech tax.
Other Stocks to Consider
Other top-ranked stocks in the broader medical sector are Intuitive Surgical ISRG, Illumina, Inc ILMN and Amedisys, Inc. AMED. While Intuitive Surgical and Illumina sport a Zacks Rank #1 (Strong Buy), Amedisys carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an expected long-term earnings growth rate of 12.1%.
Illumina expects long-term earnings growth of 20%.
Amedisys has an expected long-term earnings growth rate of 17.5%.
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