10 S&P Healthcare Stocks With Growing Revenues

As healthcare reform has been a central issue leading up to the election, I’ve screened the S&P 500 for healthcare stocks that have weathered the debates.

We took the biggest healthcare companies and selected the ones with the most consistent earnings growth in the last 4 years. These companies were then screened for encouraging accounts receivables trends, meaning they have been able to collect from their debtors. The companies in this list were all able to decrease the proportion of their receivables to current assets in the last quarter.

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Put another way, the 10 companies below have historically been able to increase their earnings each quarter and their revenues have grown faster than their receivables.

Something to keep in mind: Changes to Medicare and Medicaid reimbursement rates could affect how healthcare products such as heart valves from Edwards Lifesciences (EW) and Medtronic defibrillators (MDT) are paid for.

Are these companies capable of maintaining profitability? Browse through the list below:

1. Alexion Pharmaceuticals, Inc (ALXN, Earnings, Analysts, Financials): Engages in the discovery, development, and commercialization of biologic therapeutic products in the United States, Europe, Latin America, Japan, and the Asia Pacific. Market cap at $20.08B, most recent closing price at $104.03. Revenue grew by 47.94% during the most recent quarter ($274.72M vs. $185.7M y/y). Accounts receivable grew by 32.91% during the same time period ($282.72M vs. $212.72M y/y). Receivables, as a percentage of current assets, decreased from 30.37% to 22.15% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

2. Becton, Dickinson and Company (BDX, Earnings, Analysts, Financials): Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Market cap at $15.15B, most recent closing price at $75.90. Revenue grew by 1.47% during the most recent quarter ($1,980.53M vs. $1,951.89M y/y). Accounts receivable grew by -7.19% during the same time period ($1,160.34M vs. $1,250.19M y/y). Receivables, as a percentage of current assets, decreased from 24.64% to 21.96% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

3. Covidien plc (COV, Earnings, Analysts, Financials): Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap at $27.04B, most recent closing price at $56.32. Revenue grew by 2.77% during the most recent quarter ($3,007M vs. $2,926M y/y). Accounts receivable grew by -18.09% during the same time period ($1,662M vs. $2,029M y/y). Receivables, as a percentage of current assets, decreased from 32.99% to 26.56% during the most recent quarter (comparing 13 weeks ending 2012-06-29 to 13 weeks ending 2011-06-24).

4. Edwards Lifesciences Corp. (EW, Earnings, Analysts, Financials): Edwards Lifesciences Corporation offers products and technologies designed to treat advanced cardiovascular disease worldwide. Market cap at $10.01B, most recent closing price at $86.51. Revenue grew by 8.53% during the most recent quarter ($447.9M vs. $412.7M y/y). Accounts receivable grew by -6.17% during the same time period ($325.4M vs. $346.8M y/y). Receivables, as a percentage of current assets, decreased from 29.34% to 23.45% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

5. Gilead Sciences Inc. (GILD, Earnings, Analysts, Financials): Engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Market cap at $50.22B, most recent closing price at $66.38. Revenue grew by 12.54% during the most recent quarter ($2,405.19M vs. $2,137.25M y/y). Accounts receivable grew by -12.16% during the same time period ($1,702.82M vs. $1,938.64M y/y). Receivables, as a percentage of current assets, decreased from 31.17% to 29.14% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

6. Medtronic, Inc. (MDT, Earnings, Analysts, Financials): Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. Market cap at $43.35B, most recent closing price at $42.49. Revenue grew by 1.57% during the most recent quarter ($4,008M vs. $3,946M y/y). Accounts receivable grew by -7.93% during the same time period ($3,448M vs. $3,745M y/y). Receivables, as a percentage of current assets, decreased from 40.33% to 37.55% during the most recent quarter (comparing 13 weeks ending 2012-07-27 to 13 weeks ending 2011-07-29).

7. Merck & Co. Inc. (MRK, Earnings, Analysts, Financials): Provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Market cap at $141.56B, most recent closing price at $46.48. Revenue grew by 1.32% during the most recent quarter ($12,311M vs. $12,151M y/y). Accounts receivable grew by -3.81% during the same time period ($8,152M vs. $8,475M y/y). Receivables, as a percentage of current assets, decreased from 26.18% to 22.87% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

8. Varian Medical Systems Inc. (VAR, Earnings, Analysts, Financials): Designs, manufactures, sells, and services equipment and software products for treating cancer; and x-ray products worldwide. Market cap at $6.46B, most recent closing price at $58.36. Revenue grew by 8.59% during the most recent quarter ($705.25M vs. $649.44M y/y). Accounts receivable grew by 4.64% during the same time period ($608.83M vs. $581.86M y/y). Receivables, as a percentage of current assets, decreased from 31.67% to 30.18% during the most recent quarter (comparing 13 weeks ending 2012-06-29 to 13 weeks ending 2011-07-01).

9. Waters Corp. (WAT, Earnings, Analysts, Financials): Designs, manufactures, sells, and services high performance liquid chromatography, ultra performance liquid chromatography, and mass spectrometry (MS) instrument systems and support products primarily in the United States, Europe, Japan, and Asia. Market cap at $7.11B, most recent closing price at $81.06. Revenue grew by 0.86% during the most recent quarter ($451.46M vs. $447.63M y/y). Accounts receivable grew by -2.79% during the same time period ($355.14M vs. $365.33M y/y). Receivables, as a percentage of current assets, decreased from 20.3% to 17.2% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-07-02).

10. Watson Pharmaceuticals, Inc. (WPI, Earnings, Analysts, Financials): Engages in the development, manufacturing, marketing, sale, and distribution of generic and brand pharmaceutical products focused on urology and women’s health in the United States, western Europe, Canada, Australasia, South America, and South Africa. Market cap at $11.16B, most recent closing price at $87.44. Revenue grew by 25.28% during the most recent quarter ($1,355.2M vs. $1,081.7M y/y). Accounts receivable grew by 6.27% during the same time period ($876M vs. $824.3M y/y). Receivables, as a percentage of current assets, decreased from 41.1% to 37.76% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).