stockmarket

Could telemedicine upend the Primary Health Properties share price?


Could telemedicine upend the Primary Health Properties share price?

Primary Health Properties (LSE:PHP) develops new healthcare facilities and rents them to GPs, chemists, and healthcare providers. It has cornered a thriving market with long leases and little reason to think its tenants might want to leave. Its share price has soared in recent years, but the delivery of healthcare is being upended by telemedicine. Does this have the potential to eradicate the need for surgeries?

Virtual diagnosis
Virtual doctors’ appointments have taken on a life of their own since lockdown. The ability to book an appointment online and carry it out via video call is simple and increasingly appealing. It means you no longer have to endure a journey, parking, risk of infection or a long wait in the doctor’s surgery. Plus, you get a review of the session sent to you as the appointment ends. From the GP’s point of view, they can see more patients, are at less risk of exposure to bugs and can reallocate cancelled slots more easily than no-shows in a real-world setting. The efficiency of the virtual environment could make a sizeable difference in seeing more people sooner. But sometimes, a doctor will need to examine patients in a real-life setting.

Share price fluctuations
I imagine healthcare staff will have to continue operating from surgeries to protect patient’s records and privacy, so I do not think telemedicine is an imminent threat to the future of GP surgeries. It does not appear to be something Primary Health Properties is worrying about either. In fact, the coronavirus crisis may increase demand for purpose-built healthcare facilities. In its half-year results this week, it announced a £120m share placing to fund further acquisitions and growth.

Primary Health Properties operates as a real estate investment trust (REIT), which means it must share its profits among stockholders. This has made it a lucrative investment in recent years with a rising dividend yield (currently 3.7%). Its share price fell in response to the placing, but has risen 18% since the 2020 stock market crash.

For now, I don’t think telemedicine will adversely affect the PHP share price. I think it is a less risky investment than many other property stocks and I would consider adding it to an income portfolio.

Investing in telemedicine
Telemedicine is relatively new and mainly provided by US companies or private UK companies. However, there is an AIM-listed venture capital firm called Draper Esprit (LSE:GROW) that invests in this area. Valued at around £566m, it has a price-to-earnings ratio of 14, and earnings per share are 33p.

Draper Esprit’s portfolio includes technology companies focused on long-term growth in areas of artificial intelligence, cloud computing and digital health. This includes Push Doctor, which works with the NHS to provide GP video services; MediDate affordably connects its patients with leading surgeons; while Ieso Digital Health provides mental health and therapy support remotely.

The Draper Esprit share price has had a rocky five years. Since the March stock market crash, it has risen 78%, but is still 20% lower than its highest share price this year. I think it looks like an interesting investment opportunity, particularly if you want to invest in new areas of tech and healthcare. But bear in mind, it is a high-risk stock.

The post Could telemedicine upend the Primary Health Properties share price? appeared first on The Motley Fool UK.

Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2020

First published on The Motley Fool

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.