Up 23% this year, why Ramsay Health Care shares are tipped for more ‘compelling upside’

Ramsay Health Care Ltd (ASX: RHC) shares are edging lower today.

Shares in the S&P/ASX 200 Index (ASX: XJO) healthcare stock closed yesterday trading for $42.74. In late morning trade on Friday, shares are changing hands for $42.65 apiece, down 0.2%.

For some context, the ASX 200 is just about flat at this same time.

Taking a step back, Ramsay Health Care shares have strongly outperformed in 2026, up 23.3% compared to the 0.3% year to date gains posted by the benchmark index.

And the ASX 200 healthcare stock also recently increased its passive income payouts, boosting its fully franked interim dividend by 6.3% to 42.5 cents a share.

Ramsay Health Care stock currently trades on a 1.9% fully franked trailing dividend yield.

And looking ahead, Nathan Hughes, an Australian equities portfolio manager at Perpetual, believes there’s plenty more upside potential for the Aussie-focused healthcare provider (courtesy of The Australian Financial Review).

Here’s why.

Should I buy Ramsay Health Care shares today?

Asked which stock his fund holds that’s most undervalued by the market, Hughes replied, “Ramsay Health Care presents compelling upside.”

He noted, “The negatives, such as labour inflation and changes to private health insurance rebates that may impact industry participation, are now well understood.”

And Ramsay Health Care shares could benefit from their renewed focus on the Aussie market.

According to Hughes:

Beyond the demerger of the Ramsay Santé assets – the European hospitals business Ramsay announced it would spin off in February – we think it’s clear the focus of the company is the core Australian business.

There is significant opportunity to improve operating performance and asset productivity in this division, with a sensible approach to capacity and utilisation in contrast to years of expansion. As such, return on invested capital should improve.

Hughes also pointed to the company’s strong balance sheet and the fully franked dividend on offer as reasons to be optimistic for ongoing share price growth.

He concluded:

Further capital repatriation from offshore is not out of the question in the medium term. This would give the company plenty of financial flexibility, noting Ramsay has a large balance of surplus franking credits.

What’s the latest from the ASX 200 healthcare stock?

Ramsay reported its half year results (H1 FY 2026) on 26 February.

Highlights for the six months to 31 December included underlying earnings before interest and tax (EBIT) of $536.7, up 7.3% year on year.

And on the bottom line, underlying net profit after tax (NPAT) of $171.7 million increased by 8.1%.

Ramsay Health Care shares closed up 10.4% on the day of the results release.

The post Up 23% this year, why Ramsay Health Care shares are tipped for more ‘compelling upside’ appeared first on The Motley Fool Australia.

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• Ramsay Health Care shares rebound 15% in June: Can they keep going?
• Healthcare shares led the ASX 200 last week. Is a sector comeback underway?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.