You are here: Home - Investing - Experienced Investor - News -

Stock of the week: ConvaTec

0
Written by: YourMoney.com
19/12/2016
Helal Miah, investment research analyst at The Share Centre, picks new FTSE 100 entrant ConvaTec as stock of the week.

As health care equipment group, ConvaTec, joins the FTSE 100 after the recent reshuffle, we have upgraded the firm to a ‘buy’. The group operates four main businesses, Wound Therapy, Ostomy Care, Continence & Critical Care and Infusion Devices, each of which have at least a top three position in each of the respective markets. The company’s divisions provide medical consumables which are tied to the management of chronic medical conditions, the demand for which generates consistent recurring revenues as these are defensive markets.

Investors should note that the firm has strong growth prospects due to ageing populations and the rising prevalence of chronic conditions such as diabetes. Furthermore, patients with chronic diseases are living for longer and often suffer the condition for the rest of their lives.

ConvaTec has long serving management on-board with many years of experience who intend on having a conservative dividend pay-out ratio of 35-45% of adjusted net income. The shares trade on a forward P/E ratio of 16x, which is comparable to its peers. We start our coverage of the company with a ‘buy’ recommendation for investors seeking a balanced return and willing to accept a medium level of risk.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week