5 Cheap Healthcare Stocks To Invest In

In this article, we discuss the 5 cheap healthcare stocks to invest in. If you want to read a detailed analysis of the healthcare industry, go directly to 11 Cheap Healthcare Stocks To Invest In.

5. Patterson Companies, Inc. (NASDAQ:PDCO)

Price as of October 3: $25.17

Patterson Companies, Inc. (NASDAQ:PDCO) is a medical supplies company primarily focused on veterinary and delta health products. At the end of Q2 2022, 20 hedge funds maintained a stake in the company with a combined value of $167.7 million. In the previous quarter, 18 hedge funds were bullish on the company with investments valued at $143.7 million.

As of October 3, Patterson Companies, Inc. (NASDAQ:PDCO) has a dividend yield of 4.11% compared to the 1.58% healthcare industry average. The company has a payout ratio of 45.68%. The latest quarterly dividend of $0.26 was declared on September 13, payable by November 4 to the shareholders of record on October 21.

On September 1, Piper Sandler analyst Jason Bednar reiterated an Overweight rating on Patterson Companies, Inc. (NASDAQ:PDCO) shares and lowered the price target to $40 from $42 post Q1 results. The analyst added that despite the lower-than-expected dental and operating margin percentages, he still likes the risk/reward profile of the company.

Here is what Heartland Advisors had to say about Patterson Companies, Inc. in its Q2 2021 investor letter:

“Patterson Companies Inc. (PDCO) is a leading distributor of dental and animal health products. Sales have been on the rise and the company reported a record $6.1 billion in revenue for the year ending in April. Shares of the business are up double digits through the first half of the year, and the holding has been a solid contributor to performance.

Management at Patterson has done an impressive job of expanding operating margins and making strategic acquisitions that have fit with the business’ core competencies since coming aboard in 2017. However, shares set back late in the quarter, after the company reported better than expected earnings but issued guidance that was more conservative than Wall Street expectations. Due to the ongoing unwinding of pent-up demand in dental services and the strength of Patterson’s animal health line, we believe recent earnings guidance will prove to be overly cautious.

We view recent softness in shares of Patterson as an overreaction and remain constructive on this industry leader that is priced at just .5X sales.”