Healthy profits, returns for hospital stocks
Hospitals look attractive as they have a high return on equity. Demand for their services is unlikely to wane.
Add BT as a preferred sourceHOSPITALS are a bit like hotels, except they don't leave a piece of chocolate on your pillow at night. That might seem a little facetious. But, essentially, hospitals are places where people rent a room or a bed space when they are unwell and check out when they feel better. During their stay, they are cared for by nurses and doctors in exchange for a consideration.
According to Deloitte, global healthcare spending could rise around 5 per cent annually to exceed US$10 trillion by 2022. Of course, not every dollar will be spent in hospitals. Other healthcare companies have a vital role to play too. These include pharmaceutical companies such as GlaxoSmithKline in vaccines and Abbott in diagnostics.
GlaxoSmithKline's vaccine business generated sales of nearly US$7.5 billion in 2018 by delivering two million vaccine doses per day in 160 countries. Abbott is notable in diagnostics and medical devices. Every day, more than 10 million tests are run on its diagnostics machines to provide lab results for millions of people. The division generated US$7.5 billion in annual sales.
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