Technology has reached a point where it is leaving no stone in the global economy unturned, and this has become increasingly apparent in healthcare. More specifically, a confluence of mobility and high-speed internet access, cloud computing, and analytics have made remote care via phone or teleconference a reality -- and it turns out a pandemic is all that was needed to spur mass adoption.

To be sure, the economic lockdown to halt the spread of COVID-19 has accelerated growth in telemedicine, and it's a real possibility decelerating growth in 2021 could cause fits for some stocks in this arena. But if you have some spare cash and a decade or so to wait it out, I think Teladoc (TDOC 0.21%) and Amwell (AMWL -7.84%) are buys right now.

Doctor holding stethoscope up to illustrated icon of a person

Image source: Getty Images.

The undisputed leader of telemedicine

In 2015, a very small company named Teladoc pioneering a novel means of delivering care via the internet made its public debut. Fast forward a few years, and Teladoc is quickly becoming a well-known name in the medical sphere. But with a market cap of $28 billion in a global industry that accounts for trillions of dollars in spending every year, Teladoc is still in the very early chapters of its growth story.  

By way of steady growth (and some help from smart acquisitions), Teladoc has built itself into the leader in the fast-growing virtual care industry -- both in the U.S. and abroad. Its lead widened in Q3 2020. The company said patient visits with one of its healthcare professionals more than tripled year over year to 2.8 million during the summer 2020 months, and revenue increased 109% compared to a year ago to $289 million (or up 90% on an organic basis when excluding the acquisition of InTouch Health in January).

The surge in growth this year has come with a small asterisk, though. COVID-19 has increased the number of patients seeking a virtual visit with a physician as they shelter in place and maintain social distancing. There's certainly a risk that in-person treatments will regain some favor once the pandemic is over. But I believe the long-term potential is still there. Teladoc can handle far more than primary care consultations and has been growing in other areas like hypertension treatment, dermatology, and mental health, to name just a few. And recently adding digital care specialist Livongo Health (which was also growing by triple-digit percentages and would also have been on this list as well if it was still a stand-alone company) opens up new doors for the company in areas like diabetes care and weight management.

In short, while the pandemic might be inflating the growth figures for Teladoc this year, virtual care has real benefits for patients. It increases patient access to primary care and specialty medical professionals, adds convenience to the equation (fewer trips to the doctor and less waiting around), and in turn, saves on cost. There is a long runway of growth ahead of this tiny industry. The potential for further shake-up of the global healthcare landscape is massive, and this is still a small-ish company that has the early lead in the race. I think I'll remain a buyer for the long term.

A newcomer to the party, quickly out of favor

Alphabet- (GOOGL -0.27%) (GOOG -0.28%) backed Amwell is a more recent arrival in the virtual care marketplace. It just completed its IPO in September, and shares more than doubled in the weeks after it started public trading. But the stock has since gone in reverse and is now "only" some 20% higher than its IPO price. If you believe healthcare technology has a bright future, this one belongs on your wishlist.  

Much like Teladoc, Amwell is also getting a boost in activity on its platform due to the pandemic. During the third quarter, total visits exploded to 1.41 million, compared to just 255,000 a year ago. Total revenue also increased 80% to $62.6 million. With respectable expansion during its first quarter as a public concern, why have shares pulled back?  

For one thing, Amwell is smaller than Teladoc, so expectations may have been set that its growth trajectory would outpace that of its larger peer. It's also worth noting that Amwell still operates at a loss. Free cash flow (revenue minus cash operating and capital expenses) was negative $94.1 million through the first nine months of 2020. Gross profit margin also fell to 32.7% for Amwell during the last quarter (down from 45.1% last year) because of lower-margin patient visits related to the pandemic. For the sake of comparison, Teladoc's gross margin was 62.7% over the last 12-month stretch. 

However, Amwell is flush with $1.1 billion in cash and short-term investments and has zero debt after its IPO. As it grows, its profitability profile will improve just as it did for Teladoc over the last few years. And with a current market cap of just $5.3 billion, it's still very early days for this promising healthcare company as it helps care providers get up to date with the tech needed to provide virtual visits. Total active providers on its platform of 62,000 at the end of Q3 versus only 6,000 last year is an incredibly promising sign. Expect a wild ride for this stock, but if you have time on your side, it looks like an attractive long-term purchase.