Population aging will no doubt be amongst the most important demographic trends that affect us as we progress through the 21st century. This is likely to be good news for companies like Shire (SHP) and GlaxoSmithKline. Demand for healthcare should be stimulated as the ‘baby boomers’ retire and the elderly proportion of the grows. 

Indeed, a recent study by the consulting group, McKinsey, estimates that UK healthcare could be a £200bn industry by 2030. With this theme in mind, we explore how many companies in the healthcare sector qualify for Stockopedia’s GuruScreens.

Immunodiagnostic Systems: Dividend screen hat-trick

Academic studies have shown that during sideways markets, high dividend paying stocks deliver a higher proportion of returns. It is therefore interesting to note that Immunodiagnostic Systems(IDH)- a producer of medical diagnostic products - qualified for the Best Dividends Screen on 2 July. The company made the grade on the basis that it has paid dividends every year, without fail, for eight years. The company also has a low payout ratio and limited debt.

Immunodiagnostic Systems also qualifies for the Dividend Achievers Screen because the company has a high 5 year EPS compound annual growth rate, alongside a current ratio that exceeds 1.5 (not to mention the eight year dividend streak). In addition, the company qualifies for the Geraldine Weiss Screen, which looks for companies that have grown their dividends and earnings consistently. Immunodiagnostic’s annual report for last year attributes this growth to “greater market penetration of core markets (US and Europe) with geographic expansion targeted at the fast-growing markets of China and Brazil”.

Takeover rumours push Shire onto momentum screens

Shire (SHP) is a specialty biopharmaceutical company. It has been identified as a takeover target by the US

 group, AbbVie. Back in June, AbbVie offered to buy Shire shares at a 30% premium. Although Shire’s CEO Flemming Ornskov has urged shareholders to reject AbbVie’s offer, he has also said that he would consider selling the company for an appropriate price.

This gossip around a takeover has helped drive Shire’s price upwards. It has beaten the market by 110% over the last year, 68% over the last 3 months and 40% over the last month. The company…

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