Hill-Rom Holdings, Inc. HRC has been gaining investor confidence on continued encouraging performance. Over the past year, the stock has gained 2.9% against its industry’s 5.3% fall and the S&P 500’s 6.7% decline.
This renowned global medical device company has a market cap of $5.83 billion. The company has an earnings growth rate of 14% 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.
What Makes the Stock an Attractive Pick?
Several Strategic Acquisitions and Divestments to Add Value
Hill-Rom’s merger and acquisition (M&A) pipeline continues to be robust. The company pursues acquisitions to accelerate growth in five key clinical focus areas — patient mobility, wound care and prevention, surgical, safety and efficiency, clinical workflow solutions and respiratory help. Hill-Rom’s Welch Allyn buyout has enabled it to expand its channel access and call points as well as enhance clinical workflow through EMR connectivity solutions. We are also upbeat about Hill-Rom’s co-marketing contract with Siemens Healthineers to create an integrated point-of-care diagnostic instruments portfolio to enable comprehensive diabetes care in a single visit.
We also take note that Hill-Rom and IMRIS recently announced the commercial launch of a multi-functional operating room (OR) table, particularly designed for the IMRIS Surgical Theatre.
Expansion Through Innovation
For quite some time now, Hill-Rom has been focusing on expansion through product development which is reflected in the company’s rising research and development expenditure. Through fiscal 2018, new products generated more than $300 million in revenues. Within the Surgical Solutions business, Integrated Table Motion is gaining strong momentum. This apart, the Da Vinci XI Robot is also performing well.
In patient support systems, the company launched Hill-Rom Envella Air Fluidized Therapy Bed. Within the respiratory care business, it has introduced the Monarch Airway Clearance System. The company also recently announced the upgrade of its Welch Allyn Spot Vision Screener. Hill-Rom has also launched a medical-surgical bed solution for hospitals named Hill-Rom Centrella Smart+ bed.
Positive Demography — A Growth Factor
As a result of the growing population of elderly and obese, there are rising incidences of complex diseases and conditions such as diabetes, congestive heart failure and respiratory disease. There is an increased demand for sophisticated means to deliver care to patients, such as improved medical technologies, communication tools and information technologies. This, in turn, expands Hill-Rom’s scope of growth. We believe the company’s constant efforts to cope with changing demand trends with new differentiated products will enhance revenue growth and improve margins.
Other Key Picks
Othertop-ranked stocks in the broader medical space are Integer Holdings Corporation ITGR, Surmodics, Inc. SRDX and Veeva Systems VEEV.
Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock flaunts a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here .
Integer Holdings, with a Zacks Rank #1, has an earnings growth rate of 50.8% for the first quarter of 2019.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2 currently.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
Surmodics, Inc. (SRDX) : Free Stock Analysis Report
Hill-Rom Holdings, Inc. (HRC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research