These three healthcare stocks should hold their value for years.

Investors looking for a solid investment in healthcare stocks don’t need a bagful of cash. Shares in Takeda Pharmaceutical ( TAK -0.20%), Grifols SA ( GRFS -1.58%), and Bayer AG ( BAYR.Y 0.06%) all trade for $20 or less. Of course, being inexpensive doesn’t go hand in hand with being a good stock. In fact, often the opposite is true. However, these companies are bucking market trends by gaining in share price this year, and have thriving balance sheets as well as reasonable price-to-earnings (P/E) ratios.

On top of those pluses, these three companies all have a history of offering above-average dividends, making them solid long-term value bargains. Image source: Getty Images. 1. Takeda Pharmaceutical

Takeda is a Japanese biopharmaceutical company that focuses on gastroenterology, oncology, neuroscience, and rare diseases. The company’s stock is up more than 9% this year, currently trading at just shy of $15. The company’s P/E is about 22, roughly half the pharmaceutical sector average of 46. Over the past 10 years, the company has grown its revenue by 68%.

Earlier this month, Takeda reported its earnings from fiscal year 2021, and the results were mixed. While revenue was up 11.6% over 2020 to a reported $27.9 billion, net income fell 38.8% to $1.8 billion. The company did give bullish guidance, however, for 2022. It said it expected annual revenue to grow by 3.4% to $28.9 billion and for net annual income to reach $1.8 billion, up 26.9% annually.

The company has seen strong growth in several of its segments, led by its plasma-derived therapy immunology segment, which saw annual revenue rise 14% to $3.97 billion in 2021 thanks to boosted demand for Flexbumin, a solution used to treat blood volume loss caused by trauma. Takeda also saw 10% growth in its neuroscience segment to $3.8 billion in annual revenue, thanks to increased demand for Vyvanse, the attention deficit hyperactivity disorder (ADHD) drug. It also posted $3.8 billion in annual revenue in oncology, up 8% over 2020, thanks in large part to non-small cell lung cancer therapy Exkivity, which just launched in 2021. One concern, however, is that Vyvanse faces a patent cliff in August 2023, when it will face generic competition for the previously patent-protected treatment and a consequent decline in revenue.

Takeda has a generous semiannual dividend of $0.69 a share, giving it a yield of a little over 5%. The dividend is well covered, as the company’s annual cash dividend payout ratio is only 30.27%. BAYRY data by YCharts

2. Grifols

Grifols focuses on making plasma-derived medicines and transfusion medicine. The company’s stock is up more than 13% so far this year and is trading at right around $13, but its P/E ratio is still a relatively low multiple of just under 16. The company has increased earnings per share (EPS) by 260% over the past 10 years while growing annual revenue by 73% over that period.

Plasma is the lifeblood of Grifols’ business , as it operates 87 plasma centers in Europe and 410 worldwide. Grifols turns plasma into medicines to treat various medical conditions. It also is a leader in transfusion medicine, and supplies tools, information, and services to hospitals.

The pandemic cut into Grifols’ business because people were concerned about going to plasma collection centers during COVID. Now that COVID appears to be waning, Grifols reports that plasma collections are up 16% year-to-date and 9% sequentially thus far in the first quarter.

Grifols has generally paid a twice-yearly dividend, which it has raised by 180% over the past five years. Last year, however, because revenues were down due to the pandemic, it offered just one dividend of $0.46 a share, still giving it a dividend yield of 5.03%. The company has said it is discontinuing cash dividends this year until it decreases its debt-to- EBITDA ratio below 4.0. Its current debt-to-EBITDA ratio over the trailing 12 months is 4.6, so it is possible it may issue a dividend again later this year. 3. Bayer

Bayer is a German pharmaceutical and life sciences company with three segments: crop science, pharmaceuticals, and consumer health. The stock has taken a beating in recent years, thanks to lawsuits regarding the pesticide Roundup, which is sold by its subsidiary Monsanto. Bayer ultimately settled most of the lawsuits for $11 billion in 2020. So far this year, however, the stock is up more than 29%, trading at $17. That share price increase has raised Bayer’s P/E to about 30, but the […]

source Got $20? These 3 Healthcare Stocks Could Be Bargain Buys for 2022 and Beyond

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