There’s good money being made in the health care business
Tuesday, November 24, 2009
The 52 health care companies in the Standard & Poor’s 500 index will finish this decade with average profits nearly triple what they were when the decade began. Not bad, especially when you consider all the companies in the index will end the decade with slightly lower profits.
On average, the companies in the [health care] sector saw sales growth of 160% while profits rose 175% over the decade. Four of the companies saw their profits drop during the decade, but all still are expected to make money this year.
That’s according to MarketWatch, where Russ Britt writes:
. . . that level of money-making seems unlikely to change anytime soon, even if lawmakers pass the legislation that’s working its way through Congress. Experts say there just aren’t many reform proposals that would take a significant bite out of health-care profits. . . .
Through the decade, the industry has proven it’s not only recession-proof. It’s also remarkably lucrative by any measure. Along the way, those riches have turned the sector’s stocks into Wall Street darlings, second only to the energy sector for a 10-year run that saw their market value rise nearly four-fold.
All 52 health care companies in the S&P 500 are expected to turn a profit in 2009, while many businesses in other sectors are struggling. Six health insurance companies are expected to have a combined profit on the year of more than $10 billion. A decade ago, their combined profit was just over $3 billion.