I believe that healthcare is an excellent sector to invest in and the ASX is home to a number of exciting healthcare shares.
The world’s population continues to age, which will help drive growing demand for additional healthcare services over the next few decades. Alongside this, the cost of healthcare services continues to rise.
Here we look at 2 ASX healthcare shares that I believe have strong long-term growth potential: Ramsay Health Care Limited (ASX: RHC) and ResMed Inc (ASX: RMD).
Ramsay
Ramsay has evolved significantly over the past few decades. It has transitioned from a small Australian operation to become Australia’s largest private healthcare provider, with operations in 11 countries including the United Kingdom, France and Italy. The company is also significantly larger than the number two hospital operator in Australia, Healthscope Limited.
Ramsay’s size and scale enable it to spread its operating costs. This also provides it with a competitive advantage in negotiations with health insurers. Although Ramsay’s overall debt position is relatively high, in my opinion it appears to be manageable.
This ASX healthcare share has been impacted by the ban on non-essential surgeries. As a result, its share price was hit hard in the early phase of the crisis. However, elective surgeries are now beginning to recommence in Australia with other markets set to follow. Therefore, Ramsay may emerge from its current issues faster than first anticipated.
Also, Ramsay has successfully closed a number of key government deals in Australia and the United Kingdom during the pandemic. These deals will ensure that the company’s hospitals do not run at a loss during the current period.
ResMed
ResMed manufactures devices and cloud-based software solutions for the treatment of sleep apnoea and other chronic respiratory illnesses.
ResMed has grown to become one of the world’s leading sleep treatment companies and is now a major US-based global company. The company employs more than 7,000 people worldwide.
It provides end-to-end connected health solutions that can be used in the home, reducing the financial and resource burden of in-hospital treatment.
The global potential market for sleep apnea is huge. It is estimated that there are one billion people impacted by sleep apnoea worldwide and more than 80% undiagnosed cased globally.
New product launches and successful targeted acquisitions have all helped drive revenue growth during the past few years. This growth has continued recently, with Ramsay recording a very strong 47% increase in net income during the third quarter of FY 2020.
For more shares set for bumper growth, don’t miss the free report below.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- 3 fantastic ASX 200 shares to buy right now
- Ramsay Health Care and 1 other ASX share I would buy for both growth and income
- Insiders have been buying these ASX 200 shares
- Why the Healius share price will be in the spotlight tomorrow morning
- You could beat the market in the 2020s with these ASX healthcare shares
Motley Fool contributor Phil Harpur owns shares of ResMed Inc. The Motley Fool Australia has recommended Ramsay Health Care Limited and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post 2 ASX healthcare shares to buy for long-term growth appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/30XSkFR
Leave a Reply