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3 reasons why ResMed Inc. (CHESS) is still worth your money

It’s been a remarkable month or so for sleep apnea device maker ResMed Inc. (CHESS) (ASX: RMD). Since falling as low as $4.72 in mid-April, the shares have skyrocketed more than 15% and are currently sitting at $5.45. In the same time, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has risen just 2.8%.

Despite the strong rise, you would be wrong to put ResMed in the “too late” pile. Rather, I believe now is still the perfect time to be buying! Here are three reasons why…

  1. Although the shares aren’t cheap as such, trading on a P/E ratio of 21.3, the company has grown its revenue every single quarter since listing in 1995. It’s hard to beat that for consistency.
  2. ResMed generates most of its revenue from the Americas, so a declining Australian dollar over the long-term will prove beneficial for the company’s overall earnings. In comparison, Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) (which offers a similar product) is facing strong foreign currency headwinds.
  3. The occurrence of sleep apnea is increasing amongst the population – particularly with the rate of obesity increasing. In fact, some estimates suggest up to 3-9% of women and 10-17% of men in the US suffer from sleep apnea, which indicates that demand for ResMed’s products should remain strong for years to come.

A value price tag + growth + big dividends!

ResMed has been growing strongly for some time and looks set to continue well into the future. But there is another company in even earlier stages of growth, and is set to deliver enormous returns for years to come.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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