7 Best Dialysis and Kidney Disease Stocks to Buy
In this article, we will be taking a look at the 7 best dialysis and kidney disease stocks to buy.
Global Kidney Treatment and Dialysis Market: Rapid Growth Amid Rising Prevalence of Kidney Disease
The global kidney treatment and dialysis market is experiencing typical growth levels. According to Allied Market Research, in 2020, the market was valued at $91.2 billion and is projected to reach $129.8 billion by 2028, growing at a CAGR of 4.7% from 2021 to 2028. Projections for 2032 suggest the market reaching $185.18 billion, according to Precedence Research, with growth at a CAGR of 6.30% from 2023 to 2032.
According to the National Kidney Foundation, millions die annually from kidney failure due to unaffordable treatment. The Global Burden of Disease reported that in 2017, 1.2 million people died from chronic kidney failure, with the need for dialysis rising 40% since 1990. China may lose $558 billion over the next decade due to heart failure and kidney disease, while in the US, the demand for kidney donors is expected to increase by 8% annually from 2018. By 2040, chronic kidney disease is projected to be the 5th leading cause of death globally.
The International Society of Nephrology reported that in 2023, approximately 850 million people worldwide suffered from chronic kidney disease. In many countries, kidney failure treatments, including hemodialysis and peritoneal dialysis, are not publicly funded, with dialysis costing over $25,000 annually.
In the future, dialysis and chronic kidney illnesses may be treated most effectively using wearable artificial kidneys and implantable bioartificial kidneys. The National Library of Medicine reported:
"They are expected to contribute to higher toxin clearance with more cardiovascular stability as well as improved quality of life"
Roughly 750,000 individuals in the US alone suffer from end-stage renal illness, and 2.6 million individuals worldwide have renal replacement treatment. According to Global Market Insights, the end-stage renal disease market was estimated to be worth $114 billion in 2022 and is projected to grow to over $183.9 billion by 2032. According to Bloomberg, the Global Patient Alliance for Kidney Health was established in September 2023 by 17 patient advocacy organizations with the goal of establishing legislation that will improve access to early detection and treatment of chronic kidney disease.
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Our Methodology
For our methodology, we have ranked the best dialysis and kidney disease stocks to buy based on their total number of hedge fund holders as of Q2 2024.
“Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).”
Here is our list of the 7 best dialysis and kidney disease stocks to buy.
7. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 66
The Cigna Group (NYSE:CI) is a diversified healthcare and insurance company, with pharmacy being its primary revenue driver. In H1 2024, $87.1 billion of its $117.7 billion revenue (74%) came from the pharmacy division. With a network of over 62,000 pharmacies, Cigna benefits from strong market share, low costs, and industry partnerships. Its shares are up 15% year to date, outperforming McKesson. Cigna’s diversified model, including specialty and generic markets, allows it to access the biosimilar market, improving healthcare access for rare diseases.
The Cigna Group (NYSE:CI)'s focus on value-based care models could be a significant catalyst for growth in the dialysis and kidney disease segment. By emphasizing preventive care and early intervention, Cigna can potentially reduce the overall cost of kidney disease management while improving patient outcomes.
Cigna launched a Collaborative Care program five years ago for chronic kidney disease, using a value-based care model to enhance patient engagement and clinical outcomes. Recently, the company partnered with a Massachusetts organization to improve costs and outcomes for individuals with end-stage kidney disease, addressing the high expenses associated with kidney disease care.
Here is what The Cigna Group (NYSE:CI)’s management has to say about the company’s specialty business during Q2 2024:
“In Accredo, our specialty business, our growth continues to be fueled by secular tailwinds as well as Accredo’s differentiated strength which makes us the market leader in the space. Biosimilars, for example, represent a force of change and a substantial opportunity for continued growth and impact. At the end of June, we began dispensing our interchangeable biosimilar for Humira. Our program has zero dollar out-of-pocket costs for patients, saving them on average $3,500 per year. To deliver these savings, we have agreements in place with multiple manufacturers that will produce biosimilars for Evernorth pharmaceutical distributor, Quallent Pharmaceuticals. Now the biosimilar opportunity goes well beyond Humira. By 2030, we expect an additional $100 million of annual specialty drug spend in the U.S. will be subject to biosimilar and generic competition. Accredo is well positioned to deliver differentiated value for our clients, customers, and patients.”
In Q2 2024, from the number of hedge funds tracked by Insider Monkey, 66 hedge funds held stake in the stock with AQR Capital Management being the largest stakeholder in our database, with 1,547,245 shares worth $510,466,955. The stock also holds a Strong Buy rating based on 12 Wall Street Analysts. In the past 3 months, Wall Street analysts set a 12-month average price target for Cigna at $400.42, with a high of $438.00 and a low of $355.00. This represents a 12.81% increase from its last price of $354.94.
6. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 69
Abbott Laboratories (NYSE:ABT) ranks sixth among the best dialysis and kidney disease stocks to buy according to our methodology. The company's primary focus is on creating breakthrough products that help people lead healthier lives across various stages and conditions.
Abbott's Core Laboratory division offers a comprehensive range of renal testing assays for diagnosing and managing kidney conditions. Key products include biomarkers for acute kidney injury and chronic kidney disease, the Cystatin C assay for estimating glomerular filtration rate, and the NGAL assay for detecting acute kidney damage. Abbott also provides nutritional products like Nepro for dialysis patients and oral nutritional supplements (ONS), which have been shown to reduce hospital readmissions and mortality in hemodialysis patients. Additionally, Abbott Laboratories (NYSE:ABT) developed Zemplar, a medication for treating secondary hyperparathyroidism in chronic kidney disease patients. In 2010, Abbott paid $450 million for the rights to a kidney drug and a minority stake in a Texas firm, demonstrating their commitment to expanding their offerings in this area.
Abbott Laboratories (NYSE:ABT) reported Q2 2024 financial results with $10.4 billion in sales, driven by a strong base business performance. The company saw a 4.0% reported sales growth and 9.3% organic growth, led by double-digit growth in Medical Devices. GAAP diluted EPS was $0.74, with adjusted EPS at $1.14. Abbott raised its full-year 2024 EPS guidance to $3.30-$3.40 GAAP and $4.61-$4.71 adjusted. The company also narrowed its organic sales growth guidance to 9.5%-10.0%. Key product approvals include the Esprit™ BTK system, Lingo™ and Libre Rio™ glucose monitoring systems, and the AVEIR dual chamber leadless pacemaker.
As of Q2 2024, 69 hedge funds in our database held stakes in the stock with Fisher Asset Management being the largest stakeholder out of these, with shares worth $1,092,747,717. Analysts are also bullish on Abbott giving it a Strong Buy rating. In the past 3 months, 15 Wall Street analysts set a 12-month average price target for Abbott Laboratories at $127.36, with a high of $143.00 and a low of $107.00. This represents a 10.93% increase from its last price of $114.81.
5. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 69
HCA Healthcare, Inc. (NYSE:HCA), founded in 1968 and headquartered in Nashville, Tennessee, provides healthcare services across the US. The stock is ranked 5th among the best dialysis and kidney disease stocks, offers renal failure treatment, and was the first in Florida to perform robotic live kidney donations. It is also approved for kidney and liver transplants by the United Network of Organ Sharing.
HCA Healthcare, Inc. (NYSE:HCA)'s strategic expansion initiatives and outstanding financial performance make it an excellent investment choice. HCA Healthcare Inc. (NYSE:HCA) saw a 7.1% growth in revenue in the second quarter of 2024, coming in at $16.9 billion, with an outstanding operating margin of 18.7%. HCA Healthcare Inc. (NYSE:HCA) can engage in network expansion and return capital to shareholders through share buybacks and dividends because of its stable finances. The robust cash flow of HCA Healthcare Inc. (NYSE:HCA), which surpassed $7.5 billion in 2023, enables the company to fund its expansion plans and manage debt while generating value for stockholders.
Based on the number of hedge funds tracked by Insider Monkey, 69 hedge funds held stakes in the stock as of Q2 2024 with First Eagle Investment Management being the largest stakeholder from these with shares worth $1,443,523,483. The stock holds a Moderate Buy rating. 17 Wall Street analysts have set a 12-month price target for HCA Healthcare, with an average target of $388.87. The forecasts range from a high of $455.00 to a low of $335.00, indicating a -4.15% change from the current price of $405.70.
4. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 71
Humana Inc. (NYSE:HUM) is a leading health insurance company that provides a wide range of health and wellness services, including Medicare Advantage plans, prescription drug coverage, and specialty benefits. Humana Inc. (NYSE:HUM) also provides a renal disease management program for patients with late-stage chronic kidney disease and end-stage renal disease.
In August 2024, Humana Inc. (NYSE:HUM) launched a new value-based kidney care program in partnership with Evergreen Nephrology, aimed at enhancing care for Humana Medicare Advantage members. Key features include access to Evergreen's professional team, collaboration with nephrologists, and individualized, whole-person care, available in 17 states. Humana reported Q1 2024 total revenues of $29.6 billion which was driven by higher per-member Medicare premiums and growth in individual and group Medicare Advantage memberships. The insurance segment, including Medicare Advantage, generated $28.6 billion in revenues.
As of Q2 2024, 71 hedge funds tracked by Insider Monkey held stake in the stock with Eagle Capital Management being the largest stakeholder from these, with 3,226,885 shares worth $1,205,725,580. The stock holds a Moderate Buy rating based on 14 Wall Street analysts. The analysts have set a 12-month price target for Humana, with an average target of $387.07. Forecasts range from a high of $419.00 to a low of $349.00, representing a 23.76% increase from the current price of $312.77.
3. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 82
Boston Scientific Corporation (NYSE:BSX) is a global manufacturer of medical devices. It offers products like heart monitors, brain stimulation systems, catheters, stents, and more.
Boston Scientific offers a comprehensive range of products for managing dialysis access in patients with end-stage renal disease. Key solutions include high-pressure balloons, such as the Athletis balloon which is designed for treating fibrotic or calcified lesions in arteriovenous (AV) access with minimal impact on the site. Additionally, the AngioJet system combines mechanical thrombectomy with Power Pulse™ technology for rapid thrombus removal, promoting faster blood flow restoration, reducing the need for lytic therapy, and enhancing the long-term patency of dialysis access sites.
Boston Scientific Corporation (NYSE:BSX) demonstrates a strong market position with its pulsed field ablation (FPA) technology which allows precise targeting of healthy tissue while preserving organ structure. The launch of the Farapulse FPA product in January contributed to a 17% revenue growth in Q2 2024 for the US market. With global regulatory approval expected, shares have risen 44% year-to-date, reflecting market optimism. Boston Scientific trades at a forward P/E of 30.49, nearly double that of its nearest peer, Medtronic, at 16.50.
As of Q2 2024, 82 hedge funds tracked by Insider Monkey held stakes in the stock with Citadel Investment Group being the largest stakeholder with shares worth $962,614,757. Analysts are bullish on BSX giving it a Strong Buy rating. 19 Wall Street analysts have set a 12-month price target for Boston Scientific, with an average target of $88.06. Forecasts range from a high of $100.00 to a low of $78.00, indicating a 4.83% change from the current price of $84.00.
2. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 96
Merck & Co., Inc (NYSE:MRK) is a prominent pharmaceutical company in the United States that focuses on both human and animal health. It has become a favored investment choice, boasting high returns, having achieved over 72% growth in the past five years. This success is largely attributed to the strong performance of its immunotherapy drug, Keytruda, which is a standard treatment for several types of cancer.
Keytruda has been a significant asset for Merck & Co., Inc. (NYSE:MRK), generating $26.3 billion in sales last year and accounting for about 50% of its pharmaceutical business. In Q2, sales of Keytruda rose 16% year-over-year to $7.3 billion, contributing to the company’s total sales of $16.1 billion. In December 2023, the US Food and Drug Administration approved Merck's drug belzutifan for a type of kidney cancer, expanding treatment options for patients with this condition. The company's researchers have worked with institutions like the Chronic Disease Research Group at Hennepin Healthcare Research Institute to analyze large datasets and gain insights into kidney disease outcomes.
Merck & Co., Inc (NYSE:MRK) recently received FDA approval for a new pneumococcal conjugate vaccine for adults and launched another vaccine for pulmonary arterial hypertension, which generated over $70 million in sales from its approval in March to August, coinciding with the announcement of Q2 results.
As of Q2 2024. 96 hedge funds tracked by Insider Monkey held stakes in the stock with Fisher Asset Management being the largest stakeholder with shares worth $1,766,132,800. The stock holds a Strong Buy rating. 18 Wall Street analysts have set a 12-month price target for Merck & Company, with an average target of $140.31. Forecasts range from a high of $155.00 to a low of $125.00, indicating a 21.34% increase from the current price of $115.63.
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 108
Thermo Fisher Scientific Inc. (NYSE:TMO) tops the list for being the best dialysis and kidney disease stocks to buy. The American biotech and life sciences company offers a variety of products and services and has seen a 14% stock increase since the start of 2024, largely due to its acquisition strategy. Recently, it completed the acquisition of Olink, a provider of advanced proteomic solutions, enhancing its capabilities and leadership in protein research. This move accelerates discoveries and advancements in precision medicine.
Thermo Fisher Scientific Inc. (NYSE:TMO) offers innovative dialysis devices that enhance research efficiency. The Slide-A-Lyzer Dialysis Cassettes provide excellent sample recovery, secure handling, and faster dialysis compared to traditional tubing. Microdialysis Plates are designed for small-volume dialysis, ideal for high-throughput applications, while Dialysis Flasks accommodate larger volumes for convenience. These products improve upon traditional methods by ensuring sample security with leak-proof designs, ease of use with ergonomic features, reduced plastic waste in some models, and high protein recovery with low-binding membranes.
In Q2 2024, Thermo Fisher Scientific Inc. (NYSE:TMO) reported revenues of $10.5 billion, reflecting a slight decrease of 1.3% compared to the same period last year. Nevertheless, this figure exceeded analysts' expectations by $23.4 million. As of Q2 2024, 108 hedge fund holders held stakes in the stock with Fisher Asset Management being the largest stakeholder in the stock with shares worth $1,421,748,082.
“Overall, TMO ranks first among the best dialysis and kidney stocks to buy now. While we acknowledge the potential of healthcare companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.”
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