The Republicans' tax reform bill, which is now awaiting President Donald Trump's signature, slashes the corporate tax rate to 21 percent from 35 percent, a change domestically geared healthcare companies will benefit from, according to Reuters.
"We believe tax reform should be a significant positive cash flow event, especially for healthcare services companies that tend to have limited international exposure and significant capital expenditures," Mizuho Securities analysts said in a research note, according to Reuters.
Universal Health Services, a for-profit hospital operator based in King of Prussia, Pa.; Madison, N.J.-based lab testing company Quest Diagnostics; and Cardinal Health, a drug wholesaler based in Dublin, Ohio, are among the healthcare service companies that will benefit the most from the lower corporate tax rate, according to Mizuho.
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