As uncertainty has returned to the markets once again owing to Omicron, the new variant of the COVID-19 virus, investors are now increasingly looking into stocks that could act as a hedge against a possible market crash. One of the more effective hedges at this point lie in healthcare stocks and here is a quick look at three stocks from that sector that you could look into.
1 Johnson & Johnson (NYSE:JNJ)
It is among the biggest healthcare behemoths in the world but Johnson & Johnson is now all set to have a break up that will see its consumer healthcare businesses becoming a separate entity. More importantly, the consumer healthcare division wasn’t generating much growth either and clocked only 1% worth of growth last year.
The bulk of the growth was generated by the drug unit. The talcum powder case could lead to considerable penalties and Johnson & Johnson has already set aside $4 billion towards that. However, over the long term, it is a stock that could prove attractive particularly because it has raised its dividend payouts continuously for a period of 59 years.
At a time when the panic regarding the Omicron is on the rise and the possibility of people going much outside is receding day by day, it might well be the time when telehealth becomes important again. If hospitals and clinics start filling up again with rising cases, then telehealth options are going to come to the rescue for many.
Hence, it might be a good time to add the Teledoc stock to your watch lists at this point. While it is true that Teledoc may not be solely a coronavirus-related play, it cannot be denied that a spike in cases may lead to more business for the company. Additionally, the stock is down 50% so far in 2021 and that might be another compelling reason why it might appeal to many investors.
3 Vertex Pharmaceuticals (NASDAQ:VRTX)
Last but not the least, anyone looking to negotiate this period of potential uncertainty could consider having a look into Vertex. It is a profitable healthcare business and is involved in the development of a product for the treatment of cystic fibrosis.
The product is essential for the patients and hence, it is no surprise that Vertex has continued to deliver strong gains. In the third fiscal quarter, the company managed to deliver year-on-year growth of as much as 29%, and additionally, it reported a cash balance of $7 billion at the end of the fiscal year. It might just be a strong hedge against any kind of market crash.