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Here's Why You Should Invest in DaVita (DVA) Stock For Now

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DaVita Inc. (DVA - Free Report) is gaining prominence in the MedTech space, driven by its continual efforts to upgrade services, global expansion initiatives and acquisitions.

The stock currently sports a Zacks Rank #1 (Strong Buy).

Price Performance

Shares of DaVita have gained 1.2%, compared with the industry’s growth of 0.4% on a quarter-to-date basis. Meanwhile, the S&P 500 Index declined 2.1%.



Factors to Boost DaVita

DaVita has remained committed toward expansion in international markets. In the last few years, the company has strengthened presence in the emerging and developing markets of Brazil, China, Colombia, Germany, India, Malaysia, the Netherlands, Poland, Portugal and Saudi Arabia on the back of strategic alliances and buyouts of dialysis centers.

The company is expected to benefit from these strategic efforts, which in turn will aid it in improving patient care. Currently, the company is making every effort to expand in major European and Asian countries through acquisitions and partnerships.

Moreover, DaVita continues to gain from DaVita Kidney Care, which is the major revenue-generating segment of the company. We expect this segment to continue bolstering the company’s top line in the future.

In recent times, DaVita has witnessed strong demand of dialysis services in the United States. Prudent acquisition of dialysis centers and businesses, which own and operate dialysis centers and other ancillary services, is the company’s key business strategy. These initiatives have aided the company’s top line to improve significantly over a considerable period of time.

In the second quarter of 2019, the company provided dialysis services at 2,971 outpatient dialysis centers, of which 2,723 centers were located in the United States and 248 in nine countries outside the United States.

Per management, total U.S. dialysis treatments for the second quarter were 7,520,587, or an average of 96,418 treatments per day, representing a per day increase of 2.6% year over year.

Notably, the company has also gained from calcimimetics in the second quarter of 2019 and generated operating income of approximately $40 million from the same.

Which Way Are Estimates Headed?

For 2019, the Zacks Consensus Estimate for revenues is pegged at $11.35 billion, down 0.5% year over year. For adjusted earnings, the same is pinned at $4.74, up 32.8% year over year.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Baxter International Inc. (BAX - Free Report) , Amedisys, Inc. (AMED - Free Report) and HMS Holdings Corp. (HMSY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Baxter has a long-term earnings growth rate of 12.8%.

Amedisys has a long-term earnings growth rate of 16.3%.

HMS Holdings has a long-term earnings growth rate 11%.

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HMS Holdings Corp (HMSY) - free report >>

Baxter International Inc. (BAX) - free report >>

Amedisys, Inc. (AMED) - free report >>

DaVita Inc. (DVA) - free report >>

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