Over the last 12 months the healthcare sector has once again been a great place to invest your money.
Since this time last year the S&P/ASX 200 Health Care index has generated a return of just under 23%. This compares to a 5% decline by the benchmark ASX 200 index.
The good news is that due to favourable tailwinds in the sector, I believe this outperformance can continue in the future.
In light of this, I think the two ASX shares listed below could be great buy and hold options for investors. Here’s why I would buy them:
Pro Medicus Limited (ASX: PME)
I think Pro Medicus is an ASX share that investors should consider buying and holding. It is a provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups worldwide. It was solid performer in FY 2020 despite the pandemic and reported a 23.9% increase in revenue from underlying operations to $56.8 million.
On the bottom line things were even better. Thanks to a lift in its margins to 52.5%, underlying profit before tax was up 33.4% to $30.24 million. The good news is that Pro Medicus still has a long runway for growth ahead of it. I believe this could make it a great long term investment option.
ResMed Inc. (ASX: RMD)
Another ASX healthcare share to consider buying and holding is ResMed. The sleep treatment focused medical device company was also a strong performer in FY 2020. It delivered a 15% constant currency increase in revenue to US$2,957 million and a 32% jump in net income to US$692.8 million.
I’m confident there will be more of the same over the coming years thanks to its world-class products and massive addressable market. On its earnings call this month, management stated that there are 936 million people with sleep apnoea globally. There are also over 380 million people who suffer from chronic obstructive pulmonary disease (COPD) and over 340 million people living with asthma. This gives it a significant runway for growth over the next decade and beyond.
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More reading
- Where to invest $100,000 into ASX shares right now
- Brokers name 3 ASX shares to buy right now
- 3 stellar ASX growth shares to buy in FY 2021
- Pro Medicus share price drops 5% despite strong FY 2020 growth
- 3 five-star ASX shares to buy
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended 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.
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