Yahoo Finance Here Are 3 Singapore Healthcare Stocks That Can Deliver Both Growth and Dividends
It is no secret that Singapore’s population is aging rapidly.
The country will attain the “super-aged” status by 2026, with at least 21% of the population above 65 years and above.
With a larger proportion of older folk, the government will also raise the retirement and re-employment ages for workers to 65 and 70 years, respectively.
Healthcare has been a major part of the government’s budget as Singapore’s population ages.
The Eldercare Fund will be topped up by S$500 million while the Medical Endowment Fund will receive a S$1.5 billion boost.
With healthcare being a key focus in the years ahead, healthcare stocks are well-positioned to enjoy steady growth.
Many healthcare stocks also pay out a dividend to boot, giving investors the best of both worlds.
IHH Healthcare (SGX: Q0F)
IHH is an integrated healthcare provider with a portfolio of trusted hospital brands such as Mount Elizabeth, Gleneagles, Parkway, Fortis, and Acibadem.
The group employs 65,000 people and offers a comprehensive range of healthcare services including ancillary services, diagnostics, imaging and rehabilitation.
IHH reported a strong set of results for its 2023’s first quarter (1Q 2023).
Revenue climbed 24% year on year to RM 5.1 billion while net profit more than doubled year on year to RM 1.6 billion.
The healthcare player also generated a positive free cash flow of RM 398.4 million for the quarter, up 156% year on year from RM 155.6 million a year ago.
The good results are a continuation of the growth that IHH witnessed for 2022 when its revenue rose 6% year on year to RM 18.1 billion.
Its core underlying net operating income for last year inched up 4% year on year to RM 1.7 billion.
A final dividend of S$0.0216 was paid out to investors for last year, amounting to a 17% year on year increase.
The group plans to grow organically by adding more than 2,000 new beds in Malaysia, India, and Turkey over the next three years.
It is also looking for acquisition opportunities across Asia and Europe and expects revenue growth to continue.
Econ Healthcare (SGX: EHG)
Econ Healthcare is a private nursing home operator in Singapore and Malaysia and a pioneer in providing eldercare services.
The group’s network comprises 11 Medicare centres and nursing homes in Singapore and Malaysia along with two nursing homes in China.
Econ Healthcare reported an encouraging set of results for its fiscal 2023 (FY2023) ending 31 March 2023.
Revenue rose 11.8% year on year to S$43.5 million, driven by an increase in revenue for its Medicare centres and nursing homes across its three regions.
Net profit came in at S$4.8 million, a sharp increase from the S$350,000 a year ago, the latter which included a S$3.4 million loss on investment in quoted securities.
Excluding this item, net profit would still have increased by 30.9% year on year.
The group also generated a free cash flow of S$8.1 million, although this was 18.4% lower than the prior year’s S$9.9 million.
A final dividend of S$0.0044 was declared, and together with the interim dividend of S$0.0023, the total dividend for FY2023 came up to S$0.0067.
Econ Healthcare had just opened its second nursing home in Chongqing, a 280-bed eldercare facility that is also dementia-friendly.
The ageing populations in all three countries should also provide more business opportunities for Econ Healthcare and with borders reopened, business should see an uptick in the coming quarters.
Thomson Medical Group (SGX: A50)
Thomson Medical Group, or TMG, is one of the largest private providers of healthcare services for women and children in Singapore.
The group owns and operates Thomson Medical Centre and a network of specialist clinics and diagnostic imaging centres.
For its fiscal 2023’s first half (1H FY2023) ending 31 December 2022, TMG saw revenue jump 26.6% year on year to S$184 million.
Operating profit shot up 46.4% year on year to S$45.2 million while net profit surged 82.6% year on year to S$22.8 million.
The group’s free cash flow more than doubled year on year from S$19.7 million to S$46.4 million for 1H FY2023.
A special dividend of S$0.00115 was declared and paid out for FY2022, a more than sevenfold increase from the dividend of S$0.00015.
TMG seeks to grow its Pan-Asian footprint and has been actively seeking out investment opportunities that may involve acquisitions or collaborations with healthcare businesses in the region.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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