An aging population, increasing per capita income, medical advances and longer life expectancies are all playing their part to create an appealing tailwind for companies that operate within the healthcare sector.
Given the positive investment attributes of the sector, it makes sense for investors to allocate a portion of their portfolio to health stocks. The ASX has an impressive array of enticing options for gaining health sector exposure, from micro-cap biotech hopefuls through to multi-billion dollar stalwarts.
Here are four to consider.
CSL Limited (ASX: CSL) is a best-in-class global manufacturer of plasma-based medical treatments. CSL’s ability to remain at the forefront of its niche is helped along by the massive $400 million research-and-development spend the firm utilises each year to boost its intellectual property and products. Its profit growth over the decades is a testament to quality management, as is the capital management the firm has undertaken in recent years which has seen the firm repurchase billions of dollars’ worth of stock.
Regis Healthcare Ltd (ASX: REG) has only just listed on the ASX and investors will no doubt become much more familiar with the stock in the coming months. The baby boomer generation have set the scene for an aging population which in coming years will be screaming out for services to provide care for the aged. This scenario is forecast to lead to demand for aged care facilities to triple by 2050. Regis is a leading provider of residential aged care facilities and retirement villages in Australia and is well positioned to benefit from this outcome.
Healthscope Ltd (ASX: HSO) is also a recent addition to the ASX and can most closely be compared to market leader Ramsay Health Care Limited (ASX: RHC). With private hospital and pathology operations across Australia, as well as businesses in New Zealand, Malaysia and Singapore, Healthscope is well positioned to be a major beneficiary of growth in critical care services.
Lifestyle Communities Limited (ASX: LIC) is a provider of retirement living with the group focussed on developing a number of sites in Melbourne and regional Victoria. With a focus on retirees in the over-55’s age bracket who are looking to sell the family home, downsize and move into a self-contained community living lifestyle, Lifestyle Communities look to have hit on an increasingly popular and necessary trend.
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As of 2.11.2020
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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