The COVID-19 pandemic -- which keeps worsening by the day -- also continues to hurt the stock market. Year to date, the S&P 500 is down by more than 28% (as of this writing), after climbing by nearly 29% last year. In response to the economic threat posed by the rapid spread of the SARS-CoV-2 virus, which causes COVID-19, the Federal Open Market Committee (FOMC) recently cut the federal funds rate by 100 basis points to a target of 0%-0.25%. 

The effects of this measure remain to be seen, but even if the economy plunges into a recession, many businesses will have the fortitude -- and reserves -- to survive it and continue thriving afterward. Investors focused on the long term should still look for quality stocks to buy, even in this challenging environment. In fact, two healthcare stocks I think are great buys at the moment are Teladoc Health (NYSE:TDOC) and Intuitive Surgical (NASDAQ:ISRG); here's why.

Man holding his forehead in panic with a graph pointing downward in the background.

Image Source: Getty Images.

Teladoc may benefit from the COVID-19 outbreak

Year to date, shares of Teladoc are up by 52.5%, which compares favorably to the performance of the broader market. Why is Teladoc performing much better than most? The current situation surrounding COVID-19 may actually benefit the company's business. Teladoc allows doctors and other healthcare workers to provide consultations to patients via teleconferences on electronic devices such as smartphones and tablets.

Given that state and local governments are now taking drastic measures to curb the spread of the novel coronavirus -- such as banning large gatherings and closing public schools, restaurants, and bars -- people will likely spend more time at home than they usually do. However, patients will still need medical services, and Teladoc provides a way for these patients to receive them in the comfort of their homes. This isn't merely theoretical either: Teladoc recently reported that it had experienced a 50% rise in patient visits.

It isn't clear how long the pandemic will last, and the demand for Teladoc's services could continue to rise because of this crisis. However, even putting the current situation aside, the company's prospects seem enticing. Teladoc estimates that the market for telemedicine is ripe for growth and that it could capture a decent share of this market in the future. For instance, in the U.S., Teladoc sees an opportunity to expand its membership base significantly. As noted in its most recent 10-K:

Our existing health plan Clients and self-insured Clients associated with these health plans currently purchase our solution for only a small percentage of their beneficiaries in the aggregate, and we estimate this provides us the opportunity to grow our Membership base by more than 75 million individuals in the United States by expanding our penetration within our existing Clients alone.

The opportunity in the rest of the world is even more significant, and as one of the leaders in this industry, Teladoc seems well-positioned to profit as people increasingly rely on technology to access some traditional medical services. In short, not only could Teladoc benefit from the current crisis, but the company's outlook also looks bright. 

Intuitive Surgical is a leader in an industry ripe for growth

Unlike Teladoc, Intuitive Surgical has not fared particularly well amid the stock market sell-off. Year to date, shares of the company are down by 31%. However, there are good reasons to consider buying shares of Intuitive Surgical. First, the company is the leader in the market for robotic-assisted surgery devices. During the fourth quarter of fiscal 2019, the company shipped 336 of its signature Da Vinci systems, showing growth of 16% year over year. Also, a total of 5,582 of these systems have been installed worldwide, up 12% compared to the prior-year quarter.

Furthermore, the company's revenue of $1.28 billion grew by 22% year over year, while its net income based on Generally Accepted Accounting Principles (GAAP) increased by 22.2% compared to the year-ago period. Second, there is still tremendous room for growth in this industry. According to estimates by Medtronic (NYSE:MDT) -- a company that sells medical devices -- about 2% of surgical procedures performed worldwide are done using robotic assistance. Given Intuitive Surgical's leading position in this industry, the company could benefit immensely from the increased adoption of robotic-assisted surgery worldwide.

Third, while the company makes a lot of money selling its Da Vinci systems, it makes significantly more in services including maintenance and repair, as well as the sale of instruments and accessories and the leasing of its Da Vinci systems. These sources of revenue are recurring (unlike the one-time sale of a Da Vinci system), and recurring revenue now makes up the bulk of the total.

During fiscal 2019, Intuitive Surgical's recurring revenue was $3.2 billion, accounting for 72% of its total. By comparison, during fiscal 2018, the company's recurring revenue was $2.6 billion, or 71% of its total revenue. Lastly, Intuitive Surgical is now trading at a much more attractive valuation than it was just a month or two ago because of the recent market correction. 

ISRG PE Ratio (Forward) Chart

ISRG PE Ratio (Forward) data by YCharts

Now, a forward price-to-earnings (P/E) ratio of 29 isn't cheap, not by a long shot. However, Intuitive Surgical's P/E ratio is now much lower than it was at the beginning of the year, and so is the company's price-to-earnings-growth (PEG) ratio. In other words, now may be as good a time as any to purchase shares of this company.