If you follow the health sector, GE HealthCare (GEHC 1.49%) stock may be on your radar. GE HealthCare Technologies is a medical technology company that was formed in January 2023 after completing a spinoff from GE (GE 0.28%). It now trades on the Nasdaq exchange under the ticker GEHC.
GE HealthCare has four main business segments: imaging, ultrasound, patient care solutions, and pharmaceutical diagnostics. The company is a global leader in medical imaging, which accounts for just over half its revenue, and has also invested heavily in AI for healthcare technologies.
GE HealthCare could benefit from several trends, including an aging population, growing demand for advanced diagnostics and precision medicine, and improving healthcare access and infrastructure in emerging markets. However, the stock isn't without risks. In this article, we'll explain how to invest in GE HealthCare stock and cover the basics investors should know, including whether GE HealthCare is profitable and its dividend history.
How to invest
How to buy GE HealthCare stock
Practically anyone can buy stock in GE HealthCare and other publicly traded companies by following these four steps:
- Open a brokerage account
You'll need to open a brokerage account before you can start trading stocks and ETFs. The top online stock brokers have no commissions or account fees, and many have low minimums to get started.
2. Create a budget
Next, decide how much you want to invest in GE HealthCare stock. You could opt to make a one-time investment, or you could invest on a regular schedule using a dollar-cost averaging strategy.
It's never wise to allocate your entire investing budget in a single stock. If you're new to investing, consider concentrating the bulk of your budget on investing into an exchange-traded fund (ETF), which is a basket of many different stocks, so you get automatic diversification. You can then invest a smaller percentage of your budget in GE HealthCare and other individual stocks.
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3. Do your homework
Buying shares of GE HealthCare is pretty straightforward -- but that doesn't necessarily mean the stock is right for you. Before you invest, take some time to read up on the business, how it makes money, its opportunities for growth, potential headwinds, and its competitors. If you don't understand how a business works, that's usually a sign you shouldn't invest.
4. Place an order
If you're convinced GE HealthCare stock is right for you, go ahead and place your order. To get started, enter its ticker ("GEHC") on your broker's website or mobile app.
You'll need to enter the number of shares you're buying. Alternatively, you could invest a dollar amount if your broker allows you to buy fractional shares.
Next, specify the type of order you're placing: a market order or a limit order. A market order tells your broker to fulfill the order right away at the current market price. A limit order will only be executed at a price threshold you specify.
Should you invest?
Should I invest in GE HealthCare?
Whenever you're weighing whether to invest in a stock, you'll want to evaluate the company's fundamentals, as well as your own personal circumstances and goals.
Investing in GE HealthCare stock could make sense if:
- You believe the company's heavy focus on research and development (R&D) will continue to spur innovation.
- You're optimistic that GE HealthCare's spin-off from GE will result in greater focus and profitability.
- You think that the high switching costs associated with medical technology and the significant barriers to entry in healthcare afford GE HealthCare a wide economic moat.
- You're bullish on healthcare stocks.
- You believe that trends like an aging population and a greater focus on preventive screenings will benefit GE HealthCare.
On the other hand, here are some signs you probably shouldn't invest in GE HealthCare:
- You're nervous about the potential for a shakeup in U.S. health insurance coverage.
- You're already heavily invested in the healthcare sector.
- You're seeking significant dividend income.
- You believe competitors like German-based Siemens Healthineers (SMMNY 2.24%) and Netherlands-based Koninklijke Philips N.V. (PHG 1.15%) have significant advantages over GE HealthCare.
- You're not confident in GE HealthCare's ability to succeed as an independently operated company.
Profitability
Is GE HealthCare profitable?
GE HealthCare is profitable. In 2023, its first year as a publicly traded company, GE HealthCare reported net income of $1.6 billion, down slightly from the previous year's $1.9 billion. The company's net revenue grew by 7% during the fiscal year.
GE HealthCare also invested $1 billion in R&D and paid down $1 billion in debt during its first year as a standalone company.
However, in mid-2024, GE HealthCare lowered its guidance for full-year organic revenue growth from 4% to 1%-2%. The revised guidance is due mostly to headwinds in China, where anti-corruption measures aimed at curbing the bribing of doctors along with a delayed stimulus package have led to a drop in healthcare sales.
Dividends
Does GE HealthCare pay a dividend?
Since spinning off into its own company in early 2023, GE HealthCare has paid a modest quarterly dividend of $0.03 per share. Based on its share price in late 2024, its annual dividend yield was 0.12%.
GE HealthCare has generated healthy revenues, profits, and free cash flow since completing its spinoff, all of which bodes well for its ability to maintain and grow its dividend. However, the company also invests heavily in research and development, and reinvesting its profits into new technologies is likely to take priority over dividend payments.
Exchange-Traded Fund (ETF)
ETFs
ETFs with exposure to GE HealthCare
More than 200 ETFs offer exposure to GE HealthCare, including S&P 500 ETFs and the Invesco QQQ ETF Trust, which tracks the Nasdaq-100 index. Here are a few other ETFs that include GE HealthCare in their holdings:
- Invesco S&P Spinoff ETF (CSD 1.21%): The fund invests in companies that have been spun off from larger corporations within the past four years. GE HealthCare is the third-largest holding in the fund, accounting for more than 7% of its value. The CSD ETF has a net expense ratio of 0.64%, meaning $6.40 of a $1,000 investment would go toward fees.
- The Health Care Select Sector SPDR (XLV 0.04%): The XLV ETF tracks an index of the healthcare stocks represented in the S&P 500. It provides broad exposure to the healthcare sector, including pharmaceutical companies, health suppliers, and medical technology and device companies. However, it doesn't invest in healthcare REITs. GE HealthCare is among the fund's 63 holdings, though it accounts for less than 1% of its value. The fund's 0.09% expense ratio translates to $0.90 in fees on a $1,000 investment.
- iShares U.S. Medical Devices ETF (IHI 0.56%): The ETF invests in 48 U.S. companies that manufacture and distribute medical devices. GE HealthCare is its fourth-largest holding, representing just under 5% of its value. The fund's expense ratio is 0.40%, meaning you'd pay $4 in fees if you invested $1,000.
Stock splits
Will GE HealthCare stock split?
GE HealthCare hasn't split its stock in its brief time as a publicly traded company and has not announced plans for an upcoming stock split. Companies often split their stock to make it more attainable to investors after share prices have skyrocketed.
As of November 2024, GE HealthCare's shares traded for about $90, which doesn't seem likely to scare off investors -- so a stock split is fairly unlikely in the near future.
Related investing topics
The bottom line on GE HealthCare stock
GE HealthCare stock has significant growth potential, particularly in artificial intelligence (AI) technologies. It also stands to benefit from several trends, like a focus on advanced diagnostics and preventative care, along with a graying population.
However, the company's success depends on heavy investment in R&D, which doesn't pay off overnight. Investors seeking quick profits or high dividend yields should put their money elsewhere.
FAQ
GE HealthCare stock FAQ
Is GE HealthCare a good stock to buy?
GE HealthCare could be a good stock to buy if you're focused on long-term growth and you're not looking for high yields.
How do you buy GE Health stock directly?
GE Health has a direct stock purchase plan that's administered by its transfer agent EQ Shareowner Services. To participate, you can contact EQ Shareowner Services online or by phone.
Is GE HealthCare publicly traded?
Yes, GE HealthCare became a publicly traded stock on the Nasdaq exchange in January 2023, after completing a spinoff from GE.
What is the ticker for GE HealthCare?
The ticker for GE HealthCare is GEHC.
