The desire to have a child isn't related to economic cycles. Rather it is a personal choice that is often made depending on career, relationships and individual situations. What we do know is that many people are choosing to have a child later in life and as a result the number of children born through assisted reproduction is increasing every year.
Three ASX-listed companies provide this service and may just be able to give your portfolio a bump:
Virtus Health Ltd (ASX: VRT)
Virtus has a market capitalisation of $495 million. It is known for its IVF brands like IVFAustralia, Melbourne IVF, Queensland Fertility Group and Fertility Centre.
Virtus has a strong presence in the Australian IVF market but it also has a growing footprint overseas which now includes Ireland, Singapore and Denmark.
In FY16 it grew net profit after tax (NPAT) by 11.9% and the dividend by 7.4%, which was a pleasing result for shareholders.
It's currently trading at 13.5x FY17's estimated earnings with a grossed up dividend yield of 6.58%.
Monash IVF Group Ltd (ASX: MVF)
Monash IVF is the other large operator in Australia and it has a market capitalisation of $434 million. Its brands include Monash IVF, MyIVF, Next Generation Fertility and Repromed.
Monash IVF doesn't have as much diversification geographically when compared to Virtus, with operations also in Malaysia.
In FY16 Monash IVF grew NPAT by 34.6% and increased its dividend by 22.3%, a much stronger result than Virtus.
Monash IVF is trading at 13.8x FY17's estimated earnings with a grossed up dividend yield of 6.56%.
Primary Health Care Limited (ASX: PRY)
Primary has a market capitalisation of $2 billion and is mostly known for its pathology services.
IVF Services offered by Primary Health Care Limited are lower priced than competitors and, in some instances, can be completely bulk billed. The service provided may not be the best treatment for everyone, but for those who need a small cost option this may be an alternative.
Primary is trading at 17.5x FY17's estimated earnings with a grossed up dividend yield of 4.55%.
Foolish takeaway
I think investing in IVF companies makes a lot of sense, the service will always be in demand even if there is a dip in the economy. I would be happy to own both Monash IVF and Virtus at the current prices and their big dividend yields are a large bonus.
