Hospitals are again witnessing increasing demand for their services as the COVID-19 Delta variant spreads around the world at a rapid pace. So, we think it could be wise to now scoop up shares of quality hospital stocks Tenet Healthcare (THC), Encompass Health (NYSE:EHC), and Select Medical Holdings (NYSE:SEM).The rapid spread of the coronavirus Delta variant has caused a resurgence of COVID-19 cases across several parts of the world. Five U.S. states recently broke the record for the average number of daily new COVID-19 cases in the U.S. So, hospitals are again dealing with a surge in demand for their services.
Investors’ interest in the hospital stocks is evidenced by the Health Care Select Sector SPDR Fund’s (XLV) 5.7% returns over the past month versus the SPDR S&P 500 ETF Trust’s (SPY) 2.9% gains. Furthermore, a recent study showed that breakthrough COVID-19 inflections after vaccination could cause long-haul symptoms. So, even though 73% of U.S. adults have received at least one dose of the vaccine, the need for hospital services could remain high.
Given this backdrop, we think it is wise to bet on fundamentally strong hospital stocks Tenet Healthcare Corporation (NYSE:THC), Encompass Health Corporation (EHC), and Select Medical Holdings Corporation (SEM). They are expected to continue gaining in price in the coming months as COVID-19 cases continue to climb.