Should you be investing in Health Care shares?
The health care sector is expected to have strong long term growth due to the aging population, which should increase demand for healthcare services. Additionally, governments are fiscally constrained which is likely to limit public investment in health care and advancements in medical technology is opening new opportunities. However, on the downside, health care stocks face regulatory risk-limiting growth of private health care services. Investors seeking exposure to the global healthcare sector could consider the following 3 stocks.
Ramsay Health Care Ltd
Ramsay Health Care (ASX: RHC) is a global health care company operating private hospitals. Ramsay health care has 480 facilities across 11 countries, which makes them one of the largest health care companies globally. Ramsay has recently expanded its operations in Europe (mainly France). The current share price is at A$72, with a P/E ratio in the mid 30’s and an annual dividend yield of around 2 per cent (fully-franked).
Sonic Healthcare Limited (ASX: SHL) is a leading provider of medical diagnostic services (pathology and radiology. Sonic is the dominant position in the Australian market and has established a large presence in the US and German markets and, to a lesser extent, the United Kingdom, Switzerland, Belgium, and New Zealand. Sonic continues to add bolt-on acquisitions in these markets, particularly in the U.S. and Germany, where scale is delivering a competitive cost of service. Sonic Healthcare has a share price of A$27, with a P/E ratio in the mid ’20s and an annual dividend yield of around 3 per cent (partially franked).
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).
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ASR has no position in any of the stocks mentioned.