Upgraded: Is it time to buy Ramsay Health Care Limited and ResMed Inc. (CHESS)?

Leading investment banks Morgans and Deustche Bank have upgraded both Ramsay Health Care Limited (ASX:RHC) and ResMed Inc. (CHESS) (ASX:RMD).

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ramsay Health Care Limited (ASX: RHC) and ResMed Inc. (CHESS) (ASX: RMD) are two great Australian businesses.

And it has been reflected in their exceptional returns to shareholders over the past 10 years.

In fact, an investment in Ramsay Health Care shares 10 years ago has achieved a total shareholder return (dividends plus capital gains) of 24% per annum.

While less visceral, an investment in the dual-listed ResMed Inc. still achieved an exceptional return of 11.8% per annum.

Are better times ahead?

However, despite their good fortunes over the past decade analysts continue to be bullish on both companies' future.

According to the Fairfax Press, investment bank Morgans retained an add rating on Ramsay Health Care shares and slapped it with a price target of $73.11. Morgans says an aging population, a track record of above-average growth and a trend towards public hospital outsourcing will benefit Australia's largest hospital operator. Ramsay is rapidly expanding internationally and in parts of Europe and Asia.

ResMed, a leader in the manufacture of devices for the treatment of sleep apnoea and other respiratory disorders, was upgraded by analysts at Deutsche Bank from sell to hold. The investment bank notes competitive risks, but sees the recent fall in share price and the benefits from a falling dollar as a reason to rerate the stock, Fairfax wrote.

Buy, Hold or Sell?

I always take analyst price targets with a pinch of salt. However, I'd agree with both banks that ResMed and Ramsay are great companies, with bright futures. At today's prices, I'm a net buyer of ResMed shares, but Ramsay shares are a little too expensive for me.

Motley Fool contributor Owen Raskiewicz owns shares of ResMed Inc.. Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »