Ramsay Health Care Limited (ASX: RHC) is the largest operator of private hospitals in Australia, with a market capitalisation of $14 billion.

It also has hospitals in other countries such as the UK, France, Malaysia and Indonesia. Its global network makes it one of the top five biggest operators of private hospitals in the world.

Ramsay has been a remarkable investment for shareholders who bought 10 years ago. In that time the share price has grown 574% and the dividend has grown by 396%.

With all that growth, is Ramsay still a good investment? Here are three reasons why I think it is:

Aging population

The number of people over 65 and 85 is projected to grow strongly over the next decade. The older they get the more likely they will want or need to use a hospital for surgery.

Ramsay is also going to start rolling out pharmacies in locations near its hospitals, this is great way to add to and diversify its sales.

Geographical diversification

Healthcare businesses are partially at the mercy of the government to provide funding. If the government reduces funding, it can cause big changes to the outlook of a business – just look at what’s happened to Estia Health Ltd (ASX: EHE).

Ramsay has hospitals in several other countries, therefore if Australia’s government reduces funding to Ramsay it still has its overseas operations that wouldn’t be affected by the reduced funding.

The global reach of Ramsay also means it has the opportunity to grow into other countries such as China and this would create a large additional growth runway.

Monopoly effect

When businesses are able to create a monopoly, or an economic moat, it puts them in a powerful position. Consumers have to use their product because it’s by far the cheapest, best, or because it’s the only option.

Governments decide who will operate a hospital. Once it’s built, there isn’t going to be another hospital built within a certain distance therefore the hospital has a monopoly on the local area.

This is a very strong advantage for Ramsay to have.

Time to buy?

Ramsay is probably never going to trade at a cheap valuation compared to the rest of the market. It will however, at times, be cheap when compared to itself.

It’s in a constant battle with private health insurers like Medibank Private Ltd (ASX: MPL) to reduce costs as it’s a delicate balance to keep Ramsay’s profit margins high, whilst also appeasing the private health insurers’ margins on claims.

Ramsay’s share price is down 13% compared to the all time highs two months ago, it’s trading with a price/earnings ratio of 33 with a grossed up dividend yield of 2.33%. It’s not a bargain, but I think Ramsay will make a good long term buy for Foolish investors at this price.

These Low Interest Rates Could Totally Devastate Your Retirement!

With global interest rates set to remain at these "emergency low" levels for years -- perhaps even decades -- unless you take decisive action NOW, your retirement could be seriously at risk. Click here to learn how to NOT run out of money in retirement.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. 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.