This year has been a transformative one for many industries. While many are facing new challenges related to the coronavirus pandemic, COVID-19 has also accelerated the growth of some industries. Healthcare is a great example of that, as the demand for telehealth has soared in 2020. The Business Group on Health's annual survey, which asks employers questions relating to healthcare, recently uncovered one notable trend: a rise in virtual care, or telehealth.

In 2018, just over half of respondents believed that virtual health would "play a significant role in how care is delivered in the future." That number grew to 80% this year. And 71% of employers are accelerating their adoption of virtual care and making it more available to employees.

One company that's benefiting from these trends is Teladoc Health (NYSE:TDOC). Let's take a look at just how well the company's done in 2020, and how much you would have made from investing in the stock at the start of the year.

Teladoc's been one of the hottest healthcare stocks of 2020

Year to date, shares of Teladoc are up around 150% -- nowhere near the S&P 500, which is practically flat after factoring in September's decline. To help put the company's impressive returns into perspective, let's assume you invested $10,000 into Teladoc at the beginning of the year when the healthcare stock was trading at $83. For that price, you'd be able to buy about 120 shares of the New York-based company. If you held on to those shares until today, as the stock's trading north of $215, your investment would be worth more than $26,000, making you a profit of $16,000.

Stethoscope and pen laying on a laptop.

Image source: Getty Images.

Why is the stock doing so well?

As noted earlier, Teladoc's been able to cash in on the growing demand for virtual care this year, and that's been behind the stock's strong returns thus far.

In the company's second-quarter results, released on July 29 for the period ended June 30, Teladoc reported 2.8 million total virtual visits over its platform -- a year-over-year increase of 203%. Its quarterly revenue of $241 million was also up by 85%. And while the knee-jerk reaction may be to say that these upticks are due only to COVID-19, that simply isn't the case. Teladoc CEO Jason Gorevic noted in the company's Q2 release that "in some states where the curve has flattened, we are still seeing twice as many patient visits as last year."

Even in the early stages of the pandemic, Teladoc was already seeing strong growth. In its first-quarter results, which the company released on April 29 for the period ended March 30, it recorded 2 million virtual care visits, up 92% from the prior-year period. Sales were also up 41% to $180.8 million.

Combined, over the past two quarters, patients have made 4.8 million physician visits on Teladoc's platform. That's more than the number of visits the company reported for the entire year of 2019 -- 4.1 million. And it's also on pace to smash last year's sales of $553.3 million. Year to date, sales are already at $421.8 million, which is more than 75% of 2019's total.

With numbers like that, it's not a mystery why Teladoc's stock has been performing so well.

More growth could be on the way for Teladoc

There's even more potential for Teladoc to build on these numbers, and that's because it's about to get bigger. On Aug. 5, the company announced it would merge with Livongo Health (NASDAQ:LVGO) in a cash-and-stock deal worth $18.5 billion. The companies expect that the transaction will close before the end of the year and that it will create a stronger, more diverse virtual care company.

Livongo uses health coaches to help treat people with chronic conditions, including diabetes. Its intuitive and easy-to-use Livongo meter allows patients to stay connected to their doctors and families during COVID-19, easily sharing their glucose readings. Livongo's services could make a telehealth visit via Teladoc even more valuable, as shareable data means that a patient doesn't need to bring their meter to the doctor's office in order to receive care.

One of the most exciting aspects of the deal is that by joining together, Teladoc and Livongo can reach more customers. Gorevic estimates only a 25% overlap in existing customers between the two companies. This means that there is still room for cross-marketing once these companies join forces. And that can lead to even more growth. 

Is Teladoc still a good buy today?

Without the Livongo deal, it would be a tough call as to whether Teladoc is still worth investing in, especially as life slowly returns to normal and people begin to visit their doctors offices in-person again. That would likely bring down Teladoc's growth numbers.

But the merger with Livongo drastically changes things. With even more growth opportunities to tap into, there's reason to remain bullish on Teladoc today. And if there's a second wave of COVID-19 in the coming months, the new company will be in a terrific position to meet the needs of customers.

Although Teladoc has already generated some strong returns this year, the company isn't done growing, and is still a great stock to buy today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.