Healthcare spinoffs can provide excellent long-term prospects for investments, and Embecta (EMBC.V 3.23%), Viatris (VTRS 1.41%) and GE Healthcare Technologies (GEHC 0.99%) are three exciting opportunities that could provide significant returns.
Embecta is a leading provider of diabetes injection devices, such as pen needles, syringes, and safety devices, in addition to digital applications to help diabetics manage their condition. It was spun off from Becton, Dickinson (BDX 1.74%) last April. Despite taking a tumble in the past year, the stock has shown some promise, going up 18% so far in 2021, as the company adjusts to being a stand-alone company. In the first quarter, Embecta reported $275.7 million in revenue, down 4.7% compared to the same period in 2022 and earnings per share (EPS) of $0.61.
Viatris is a spinoff of the 2021 merger of generic drugmaker Mylan and the Upjohn division of Pfizer (PFE 0.52%). Its stock is down 16% this year but is trading for only roughly 5 times earnings. The company has raised its quarterly dividend for thirteen consecutive years, and last year, it was bumped to $0.12 per share, giving it a 5% yield. Its revenue, however, fell 9% to $16.2 billion last year. To counter this, Viatris has been aiming for new generics and biosimilars and has been successful, with new drugs in 2020 bringing in $483 million.
The newest of the three, GE Healthcare was spun off from General Electric (GE -0.24%) in January. GE Healthcare focuses on medical technology, pharmaceutical diagnostics and digital solutions, with its five segments seeing revenue growth in the fourth quarter. This quarter, GE Healthcare reported $4.9 billion in revenue, up 8% year-on-year, and an EPS of $1.21. Furthermore, a Feb. 9 announcement showed GE Healthcare’s purchase of Caption Health to detect disease through Artificial Intelligence in interpreting ultrasound scans. It has yet to offer a dividend.
For those looking to invest in healthcare spinoffs, which might not usually be seen as companies with strong growth potential, Embecta, Viatris and GE Healthcare are each well worth looking into. GE Healthcare is the one that looks to have the best long-term potential, as strong cash flows and revenue growth potential make for a promising future.
