For the vast majority, healthcare is a necessary expenditure. Hence, it is often seen as a defensive industry that can withstand economic downswings.
With that in mind, the healthcare industry is an area that investors can use to anchor their portfolio or hedge against bear markets. In Singapore, there are 14 healthcare stocks represented in the SGX All Healthcare Index.
Here are the current top three yielding stocks in this list.
1. HC Surgical Specialists Ltd (SGX: 1B1) is first on the list with an attractive trailing dividend yield of 5.33%. Founded nearly a decade ago, the group specialises in the provision of endoscopic procedures such as gastroscopies and colonoscopies; and general surgery. The team of specialists conduct their operations through a network of 14 clinics located around central Singapore and residential areas.
Besides specialist services, the group has also incorporated its first GP clinic in 2016, to provide medical and palliative services to patients. The group is also looking to build up its regional experience, with an eye on possible regional expansion.
At the time of writing, shares of the company exchanged hands at S$0.67 per piece. This translates to a price-to-book ratio of 6.45 and a price-to-earnings multiple of 24.4.
2. Singapore O&G (SGX:1D8) comes in at second place with a trailing dividend yield of 4.4%. The group consists of a team of 12 specialist medical practitioners providing obstetric and gynaecology services, oncology, paediatric and dermatology.
The group was first founded in 2011, with just two obstetricians and gynaecologists, Dr Lee Keen Whye and Dr Heng Tung Lan. Since then, it has rapidly expanded its network of doctors and clinics.
Through its aggressive expansion policy, the group has more than doubled its revenue from S$13.6 million in FY2014 to S$30 million FY2017. It has also consistently paid out a dividend during its years as a listed company, and had a dividend payout ratio of around 78% last year.
At the time of writing, shares of Singapore O&G traded at S$0.34 per share. This equates to a price-to-book ratio of 3.5 and a price-to-earnings ratio of 18.6.
3. ISEC Healthcare Ltd (SGX:40T) completes this list with a trailing dividend yield of 4.1%. Through its team of 26 doctors, the group provides a range of specialist medical eye care services in Singapore and Malaysia. In 2016, the group also expanded its range of services to include general medical services through 4 clinics in Singapore’s heartlands.
ISEC enjoyed a stellar year in 2017. Revenue jumped 20% to S$37.0 million, while profit surged 22% to S$7.9 million. The group has also targeted expansion to increase its geographical footprint in Vietnam, China and Myanmar. Notably, ISEC has no debt on its balance sheet and generates consistently strong operating cash flow each year, giving it the financial muscle to expand and to pay its shareholders.
At the time of writing, shares of ISEC Healthcare exchanged hands at S$0.29 per share. This translates to a price-to-book ratio of 2.2 and a price-to-earnings ratio of 17.5.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.Motley Fool Singapore has a recommendation for Singapore Exchange Limited. Motley Fool Singapore contributor Jeremy Chia doesn’t own shares in any companies mentioned.