The consumer medical market is driven by rising fitness awareness, sustainability trends, and the growing demand for herbal healthcare products. Therefore, fundamentally strong consumer medical stocks USANA Health Sciences (USANA), Nature’s Sunshine Products (NATR), and LifeVantage (LFVN) might be ideal buys. Read on.
The medical consumer industry is currently experiencing a remarkable surge in consumer awareness, marked by a growing preference for nature-based care products. This trend has been catalyzed by the mighty green wave, which emphasizes sustainability, natural ingredients, and environmentally-friendly practices.
Therefore, I think investors could consider quality consumer medical stocks USANA Health Sciences, Inc. (USNA), Nature’s Sunshine Products, Inc. (NATR), and LifeVantage Corporation (LFVN) in order to capitalize on the Medical Consumer industry, which is top-ranked and A-rated in our proprietary rating system.
A considerable portion of the adult population in the U.S. already uses dietary supplements as part of their efforts to reduce chronic diseases and promote overall health and longevity. This consumer-driven shift toward self-directed care has helped shape the growth of the dietary supplements industry globally.
Also, the growing number of fitness centers, health clubs, and gymnasiums have fueled this growth of awareness among youngsters and is therefore expected to increase the demand for energy and weight management supplements.
Hence, the global dietary supplements market is expected to grow at a CAGR of 9% from 2023 to 2030.
Moreover, the medical herb industry is witnessing a rise in consumer awareness and a shift in attitudes towards nature-based care products, particularly in the United States.
As a result, the global herbal medicine market is projected to grow at a CAGR of 11.2%, reaching $437.60 billion by 2030.
In addition, the rise in surgical procedures, the prevalence of hospital-acquired infectious diseases (HAI), and growing awareness regarding health and hygiene maintenance should drive the disposable medical supplies market.
The US disposable medical supplies market is expected to reach $228.38 billion by 2028, growing at a CAGR of 11.5%.
Let us take a detailed look at the stocks mentioned above:
USANA Health Sciences, Inc. (USNA)
USNA develops and manufactures high-quality nutritional supplements, functional foods, and personal care products. The company offers USANA nutritional products that comprise essentials/CellSentials, such as vitamin and mineral supplements that provide a foundation of total body nutrition for various age groups.
USNA’s trailing-12-month gross profit margin of 80.39% is 156.7% higher than the 31.32% industry average. Its trailing-12-month net income margin of 6.70% is 112.3% higher than the industry average of 3.16%.
USANA’s total assets have grown at a CAGR of 8.5% over the past three years.
In the fiscal first quarter that ended April 1, 2023, USNA’s net sales came in at $248.36 million. Its net earnings amounted to $18.38 million and $0.95 per share. The company generated $13 million of operating cash flow during the quarter.
Street expects USNA’s EPS and revenue to increase 5.3% and 1.2% year-over-year to $0.70 and $230.67 million, respectively, during the fiscal fourth quarter ending December 2023.
The stock has gained 14.6% year-to-date to close the last trading session at $60.95. Its 24-month beta is 0.47.
USNA’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
USNA is also rated an A in Value and Quality and a B in Stability. Among the seven stocks in the A-rated Medical – Consumer Goods industry, it is ranked #3.
Beyond the POWR Ratings stated above, one can access USNA’s additional Growth, Sentiment, and Momentum ratings here.
Nature’s Sunshine Products, Inc. (NATR)
NATR is a natural health and wellness company that manufactures and sells nutritional and personal care products in Asia, Europe, North America, Latin America, and internationally.
NATR’s trailing-12-month gross profit margin of 1.78x is 96.6% higher than the 0.90x industry average. Its trailing-12-month asset turnover ratio of 71.58% is 128.2% higher than the 31.36% industry average.
NATR’s revenue and EBIT have grown at a CAGR of 4.6% and 3.8% over the past three years.
NATR’s net sales came in at $108.63 million in the fiscal first quarter that ended March 31, 2023. Its net income came in at $1.25 million, compared to a loss of $2.69 million in the previous-year quarter. Also, its net income per common share was $0.04, compared to negative $0.15 in the previous-year quarter.
Analysts expect NATR’s EPS and revenue to rise significantly and 2.3% year-over-year to $0.58 and $431.50 million in the fiscal year 2023. Also, the company has surpassed revenue estimates in each of the trailing four quarters, which is impressive.
The stock has soared 64.9% over the past nine months and 61.5% year-to-date to close the last trading session at $13.44. Its 24-month beta is 0.64.
NATR’s robust prospects are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
NATR has an A grade for Value, Quality, and Sentiment and a B in Stability. Within the same industry, it is ranked first.
Click here to access NATR’s additional POWR Ratings for Growth and Momentum.
LifeVantage Corporation (LFVN)
LFVN engages in the identification, research, development, formulation, sale, and distribution of nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care products, bath and body, and targeted relief products.
LFVN’s trailing-12-month asset turnover ratio of 3.02x is 234.2% higher than the 0.90x industry average. Its trailing-12-month gross profit margin of 80.18% is 156% higher than the 31.32% industry average.
LFVN’s total assets have grown at a CAGR of 8.6% over the past three years.
On June 15, LFVN celebrated the first anniversary of its TrueScience® Liquid Collagen, a health product that promotes optimal health processes. Since its launch in the United States in June 2022, the product has performed exceptionally well, exceeding expectations and generating significant business growth.
The recent introduction of Liquid Collagen in Japan, New Zealand, and Australia in March has also yielded positive results.
On June 13, LFVN announced an approved extension to the previously authorized stock repurchase program extending it until December 31, 2026. Additionally, the company announced that it had authorized a pre-arranged stock trading plan to repurchase a limited number of shares of the company’s common stock in accordance with the guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934.
LFVN’s President and CEO, Steve Fife, said, “We have a strong balance sheet and remain committed to enhancing shareholder value through a balanced approach to capital allocation encompassing investments in growth initiatives, quarterly dividend payments, and share repurchases.”
The company pays an annual dividend of $0.14, which translates to a yield of 3% at the current price level. It has a four-year average dividend yield of 0.58%.
LFVN’s net revenue increased 7.5% year-over-year to $53.74 million in the fiscal third quarter, which ended March 31, 2023. While its gross profit increased 6.9% year-over-year to $43.12 million, net income per share came in at $0.08.
The stock has gained 20.2% year-to-date and 33% over the past three months to close the last trading session at $4.47. Its 24-month beta is 0.66.
LFVN’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
LFVN also has an A grade for Quality and Value and a B in Stability and Sentiment. It is ranked #2 in the same industry.
To access additional POWR ratings for LFVN’s Growth and Momentum, click here.
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USNA shares were unchanged in premarket trading Monday. Year-to-date, USNA has gained 14.55%, versus a 18.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor’s degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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