The Canadian healthcare stocks on our list are trading at low EV/EBITDA multiples relative to peers in the healthcare industry
SmallCapPower | August 8, 2017: With an aging Canadian population comes an increase in demand for medical services. This should greatly benefit healthcare companies in general. It is important, however, to not overpay for these stocks because the anticipated future demand may already be priced into their stocks. Looking at EV/EBITDA multiples can provide a clear picture if a security is over or underpriced relative to its peers. Today we have identified four Canadian healthcare stocks trading and low EV/EBITDA multiples relative to the Canadian healthcare industry median of 12x. Remember that this is a starting point, and the fundamentals of any security should be taken into consideration before an investment is made. There is often a reason why companies trade at lower multiples than the industry.
Nuvo Pharmaceuticals Inc. (TSX: NRI) – $3.82
Pharmaceuticals
Nuvo Pharmaceuticals Inc., formerly Nuvo Research Inc., is a Canada-based healthcare company that offers a range of commercial products, including Pennsaid 2%, Pennsaid and the heated lidocaine/tetracaine (HLT) patch. The Company’s Pennsaid 2% is a non-steroidal anti-inflammatory drug (NSAID) containing 2% diclofenac sodium. Its Pennsaid 2% is indicated for treating the pain of osteoarthritis (OA) of the knee and also acute strains and sprains. The Company’s Pennsaid is a topical pain product, which is used to treat the signs and symptoms of OA of the knee. The Pennsaid combines the transdermal carrier with diclofenac sodium, which is a NSAID and delivers the active drug through the skin at the site of pain.
- Market Cap: $44,191,149
- EV/EBITDA: 3.3x
- EBITDA (LTM): $7,629,000
Concordia International Corp. (TSX: CXR) – $1.77
Pharmaceuticals
Concordia International Corp, formerly Concordia Healthcare Corp, is a Canada-based pharmaceutical company. The Company, through subsidiaries, owns a portfolio of branded and generic prescription products. Its activities are divided into four segments: Concordia North America, includes sales of pharmaceutical products, such as Donnatal for the treatment of irritable bowel syndrome, Zonegran for the treatment of partial seizures in adults with epilepsy and Nilandron for the treatment of metastatic prostate cancer; Concordia International, includes a portfolio of branded and generic products that are sold to wholesalers, hospitals and pharmacies in over 100 countries, and focuses on acquisition, licensing and development of off-patent prescription medicines; Orphan Drugs, includes Photofrin, which is for the treatment of certain forms of rare cancer, and Corporate cost centre, includes centralized costs incurred by the Company.
- Market Cap: $90,600,359
- EV/EBITDA: 8.6x
Acerus Pharmaceuticals Corporation (TSX: ASP) – $0.115
Pharmaceuticals
Acerus Pharmaceuticals Corporation, formerly Trimel Pharmaceuticals Corporation, is a Canada-based pharmaceutical company engaged in the development, manufacture, marketing and distribution of products with a focus on men’s health, including urology, and women’s health, including hormone replacement therapy and female sexual dysfunction. The Company markets Estrace in Canada, which is an oral, plant-derived 17-beta estradiol therapy for the relief of symptoms of menopause. The Company offers Natesto, which is the testosterone nasal gel in the United States for replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (hypogonadism).
- Market Cap: $24,545,705
- EV/EBITDA: 5.0x
- EBITDA (LTM): $4,742,592
Medical Facilities Corp. (TSX: DR) – $12.81
Healthcare Facilities & Services
Medical Facilities Corporation is a Canada-based company, which owns interests in over six entities (the Centers), approximately five of which either own a specialty surgical hospital (SSH) or an ambulatory surgery center (ASC). The Company’s Centers offer facilities, such as staff, surgical materials and supplies, and other support necessary for scheduled surgical, pain management, imaging and diagnostic procedures. The Centers focus on clinical specialties, such as orthopedic, neurosurgery, pain management and other non-emergency elective procedures. Its SSHs are located in South Dakota, Oklahoma and Arkansas, and ASC is located in California.
- Market Cap: $397,314,255
- EV/EBITDA: 4.6x
- EBITDA (LTM): $120,301,597
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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