Philips (PHG - Free Report) recently entered into a partnership with the United Nations Population Fund (UNFPA) and the Republic of the Congo’s Ministry of Health to address the country’s high maternal and newborn mortality rates over the next five years.
A large-scale ‘Emergency obstetric and newborn care’ (EmONC) program that will reach more than 500,000 women and 70,000 newborns is being developed by the three parties to improve access to high-quality and affordable healthcare.
The main objective of the program is to manage high-risk pregnancies and complications in healthcare facilities by training midwives, and enabling timely prevention of and intervention during complications related to pregnancy and childbirth.
Health facilities in remote parts of Congo will be fitted with solar power systems and ultra-portable ultrasound and monitoring devices as part of the program.
Moreover, community health workers will be equipped with backpack outreach kits, containing key equipment to assist in childbirth and a mobile phone to get remote technical support.
Partnership to Aid Philips Expand Global Footprint
The partnership will allow Philips to penetrate the highly underserved healthcare market in Sub-Saharan Africa, which per World Bank, has the worst healthcare facilities in the world. The region accounts for less than 1% of global healthcare expenditure.
Nevertheless, as Africa's economies improve gradually, with GDP growth projected to accelerate to 4.1 percent in 2020, demand for good quality health care is expected to increase further. Per GBCHealth data, consumer spending in Africa is expected to reach $1.3 trillion by 2030.
Thus, the company’s expanding footprint in Africa makes it well poised to meet the demand for healthcare in the region. Notably, in May 2018, the company partnered the governments of Ethiopia and Netherlands to address the critical shortage of cardiology services in Ethiopia by building the country’s first Cardiac Care Centre.
Philips also entered into a long-term partnership with the government of Kenya and the United Nations in 2017 to strengthen the country’s primary and community healthcare.
These partnerships are expected to deliver strong financial returns and boost Philips’ growth in the continent over the long run.
Moreover, these endeavors have helped Philips gain a solid foothold in International markets and expand its share in the health-tech sector, which per Mordor intelligence, is expected to witness CAGR of 12.8% from 2019 to 2024.
Zacks Rank & Other Stocks to Consider
Philips currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Cyberoptics Corp. (CYBE - Free Report) , Inphi Corp. (IPHI - Free Report) and Garmin Ltd. (GRMN - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Cyberoptics, Inphi and Garmin is currently pegged at 12%, 39.9% and 7.4%, respectively.
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