The COVID-19 pandemic has accelerated the growth of the healthcare industry. Moreover, investors are becoming increasingly bullish on the prospects of the industry due to the healthcare needs of the U.S.’ aging population and growing investments in care for that demographic. So, we think it could be wise to bet now on cheap healthcare stocks Cigna (CI) and Cardinal (CAH).The healthcare industry has witnessed substantial capital inflows over the past year as the federal government spent liberally to fight the COVID-19 pandemic. This funding has allowed several companies to upgrade their operations with new machinery and equipment purchases and additional personnel.
As the country recovers from the public health crisis, elective surgeries and the healthcare needs of the growing U.S. elderly population should keep driving the industry’s growth.
Investors’ interest in healthcare stocks is evidenced by the Health Care Select Sector SPDR Fund’s (XLV) 5.4% gains over the past month. But the increasing investor focus has made many healthcare stocks expensive now. As such, we think affordable healthcare stocks Cigna Corporation (NYSE:CI) and Cardinal health, Inc. (CAH) could be solid additions to one's portfolio.